A BIC Code is a Bank Identifier Code issued by SWIFT (Society for Worldwide Interbank Financial Communication). Think of it like an email address, SWIFT provides a messaging system which moves money from bank to bank, and each bank is identified by a BIC code.
The BIC Code is made up of several parts, for example, the BIC code where I work is PARBCHZZ. The first four letters identify the institution, in this case PARB stands for BNP PARIBAS, the next two the country - CH for Switzerland and the last two the city ZZ for Zürich.
E.G. Commerzbank Franfkurt is COBADEFF, Natwest in London is NWBKGB2L and so on
If you need to find your BIC code, look here.
The IBAN (International Bank Account Number) is a system devised so that transfers between individual bank accounts in different countries can be processed automatically. To do this a format was agreed upon which would allow the payment systems of the clearing bank to immediately know the exact bank account that a payment is supposed to go to. The IBAN is formed using the following information:
The 2 digit code for the country of your bank (which is provided by the BIC code of your bank)
A 2 digit checksum
Your Bank Sort Code (Bankleitzahl)
Your Account number
For example, if you have an account with the number 3751569 at Commerzbank in Frankfurt your IBAN would be DE30500400000003751569, broken down as follows:
DE - Country
30 - Checksum
50040000 - BLZ (sort code) of Commerzbank Frankfurt
0003751569 - Account number (three zeroes added as fillers because the account number was not long enough for IBAN rules - 22 characters)
(Oh, and before any of you ask... I just made up that account number, but you never know, it could exist, if you're feeling generous, try transferring some money to it and confuse the hell out of some poor Frankfurter!!!)
Here is an example of a UK IBAN:IBAN: GB99 RBOS 1234 56 12 3456 78
The spaces are only put in to help you read the number more easily, if you enter an IBAN on your online banking you do not need to incude them.
And that's about it ! Every bank account in the world can now be identified by it's BIC & IBAN... big brother is most certainly watching you.
I hope that clears up some of the mystery for you J-M.