International transfers from Hong Kong: SWIFT Code and Hong Kong bank codes

What is SWIFT Code?

When conducting overseas transfers, you are often asked to provide either a SWIFT Code or a BIC code. What exactly is SWIFT Code, and how is it different from BIC code? With a diverse array of financial institutions around the globe, each operating under a different system and standards, SWIFT Code was established to ensure a more secure and efficient international capital flow across borders.  

SWIFT, short for Society for Worldwide Interbank Financial Telecommunication, operates as a secure network that connects numerous financial institutions around the world. It functions as a unified financial messaging language, facilitating secure and standardised transactions among institutions. You can think of SWIFT Code as the international code for banks, consisting of 8-11 characters. Each bank has its own unique code for identification. Similarly, BIC, or Bank Identifier Code, serves a key role in cross-border financial transactions.  

Is SWIFT Code the same as Bank Code in Hong Kong?

When you conduct local transfers, you may notice that you need to input a 3-digit bank code. Similar to your ID number, this set of codes is specifically used to identify locally registered banks and is solely applicable to domestic transfers within Hong Kong. These bank codes are not the equivalent of SWIFT Codes, which are used exclusively for international transactions to identify banks and financial institutions. 

The format of SWIFT Code 

All SWIFT Codes share the same format, comprising 8-11 characters. The first 4 characters represent the bank code, followed by 2 characters representing the country code, another 2 characters representing the location code, and the last 3 characters as the branch code, identifying the designated branch of the bank. Generally speaking, the branch code is unnecessary when conducting international transfers via the SWIFT network.

How to conduct international transfers using SWIFT Code?

Wire transfer is one of the most common methods for banks to process overseas transfers. Since there is no direct connection between banks across borders, they need to communicate via the SWIFT network to notify the receiving banks about the transfer. To ensure a successful wire transfer, you need to provide the SWIFT Code of the receiving bank, the debit account number, remittance currency and amount, as well as the payee’s account number or IBAN (International Bank Account Number).

List of SWIFT Codes for major banks in Hong Kong

List of bank codes for banks in Hong Kong

Do I need to provide any other identifiers when conducting an international transfer? 

In addition to the SWIFT Code, you may need to provide additional identifiers depending on the region of the receiving bank. For example, when transferring funds to Europe, you will need the recipient’s IBAN (International Bank Account Number). An IBAN consists of up to 34 letters and numbers and is an international standard format for bank account numbers. Unlike SWIFT Codes, IBAN is used not only to identify banks but also to specify the recipient's account at the receiving bank, significantly reducing the chance of errors in international transactions.

Sort Code is another common identification code used for cross-border transfers to the UK. The 6-digit Sort Code is used to process bank transfers and clearing within the UK, ensuring funds are transferred accurately. 

Apart from IBAN and Sort Code, Fedwire Routing Number, also known as ABA Number, is also commonly used. Consisting of 9 digits, the ABA Number is used by the Federal Reserve System in the United States as a unique identification code for US-based financial institutions, facilitating both local transfers and international remittances. 

The limitation of SWIFT Codes 

You will need to consider the following factors when using SWIFT Codes as a means for cross-border transfers:

1. Time requirement 

In general, traditional banks can process international transfers in 1-5 business days, but the exact time will depend on various factors. The wire transfer process will be even longer if there is a time difference between the banks involved in the transaction, and if your funds are not processed during their business hours.

2. Transaction fees and service charges

Traditional banks typically charge a fee per transaction. Depending on the individual banks, the fees can be lower if you make international transfers via online banking and higher if you do it at the branch. Additionally, if an intermediary bank is involved in the remittance process, you may have to pay additional agency fees, further increasing the cost of your transfer.

3. Exchange rate

When considering the cost of overseas transfers, you cannot ignore exchange rate fluctuations. Generally speaking, bank exchange rates are higher than market exchange rates. If the exchange rate of the intended currency for the transfer changes frequently, the associated costs are more likely to increase.

Overseas transfer methods other than SWIFT Codes –Airwallex 

You may wish to consider using FinTech products for cross-border payments. By opening an Airwallex Business Account, you can transfer 60+ currencies to 150 countries and regions, with over 110 of them through local rails instead of SWIFT. Combined with the interbank exchange rates offered by Airwallex, you can effectively reduce the costs of overseas transfers.

Moreover, the Airwallex Business Account allows users to open local currency accounts in multiple countries and regions. When transferring money overseas, you can simply transact like a local, instead of going through the complicated procedures of international transfer. This not only speeds up the process but also eliminates all unnecessary fees.

FAQs

1. Do I need to provide a SWIFT Code when conducting overseas transfers to Hong Kong?

Yes. When transferring funds from overseas to Hong Kong, you will need to provide the SWIFT Code of the receiving bank in Hong Kong to ensure successful transfers.

2. How do you find the SWIFT Code of a bank?

In most cases, you can find the SWIFT Code of a bank on its official website or bank statements. You may also contact the bank directly if necessary.

3. What is the difference between a SWIFT Code and an IBAN?

SWIFT Code and IBAN serve as two different types of identifiers for international transactions. SWIFT Code is used to identify banks or financial institutions, while the IBAN is used to identify designated bank accounts.