How can I retrieve bank details from an IBAN?

When a transfer is made by bank transfer, the corresponding beneficiary’s bank details must be used. To ensure the right beneficiary receives the payment, you’ll need to verify the bank details you used.

How is an IBAN made up?

The bank details are used to identify a bank account number, its holder, and the bank where the account is held.

It therefore consists of :

  • The surname, first name, and company name of the holder.

  • account number: bank code, branch code, account number, and a key.

  • Whether the account is held at the bank.

  • IBAN (International Bank Account) number.

  • The BIC / SWIFT code.

In the bank account number, the bank code and branch code identify the bank and the branch where the holder’s account is held. The key is used to check the validity of the bank account, i.e. whether it exists in the bank and with the account number indicated.

The IBAN, or International Bank Account Number, is the essential identifier to make a wire transfer to a beneficiary. It is a series of numbers that can vary between 14 and 34 characters. The first two letters of the IBAN correspond to the code for the country of residence of the account, and the two preceding digits are the control key. Finally, the sequence of digits is the Basic Bank Account Number (BBAN), which compose the account number.

The final indicator is the BIC or SWIFT code, made of 8 to 11 characters used to identify the bank internationally.

It is not difficult to obtain an IBAN: the beneficiary can obtain this number directly from their bank, on their personal banking space, on a checkbook, at the bank’s counter, or from an ATM.

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Why identify an IBAN and the information linked to it?

With the high number of frauds and cyber-attacks targeting businesses, particularly financial transactions, it is paramount to check IBANs before initiating a wire transfer.

Wire transfer fraud is a fraud technique used in numerous ways, enabling fraudsters to steal large sums of money, particularly from businesses.

  • False supplier fraud is a type of fraud widely used to trap professionals. By pretending to be a supplier, the fraudster asks for his bank details to be modified in the target’s database so he can receive payments for supplier invoices on his fraudulent IBAN.

  • President fraud also targets companies: the fraudster uses the identity of the company director to obtain an urgent transfer from an employee. The fraudster uses the pressure and urgency of the request to fool the employee, who transfers the money to the fraudulent IBAN without checking it.

  • The fraudster contacts the account holder pretending to be their bank adviser and claiming irregular activity on their accounts. He will then obtain the codes to access the personal banking area and make transfers to fraudulent bank details.

These types of fraud require companies to protect themselves from the risk they represent. To do so, checks are a must. Firstly, checking all the information on the bank details corresponds to the information on the beneficiary of the transaction. The most effective way of carrying out these checks is often by making a counter-call or using bank details verification solutions that take care of these steps.

For example, by identifying the bank where the holder’s account is held, it is possible to determine whether the transfer will take place within the SEPA zone. This zone is an additional security warranty because transfers are more easily traceable. For this reason, fraudsters try to make the money disappear as quickly as possible into foreign accounts, most of which are outside the SEPA zone.

What is the SEPA zone?

The SEPA zone, or Single Euro Payments Area, covers Europe, the 28 countries of the European Union, as well as the United Kingdom, Saint Martin, Monaco, the Principality of Andorra, the Vatican, Switzerland, Iceland, Liechtenstein, and Norway. It was set up in 2002 to facilitate and secure card payments, transfers, and direct debits between European countries.

IBAN verification before payment

Checks and verifications before sending wire transfers are very important and should not be omitted, even in an emergency. This is a highly effective way of protecting against the risk of transfer fraud at every stage of the payment chain, from the creation or modification of a third-party record right through to payment.

These checks involve verifying the authenticity of the IBAN on which the payment is to be made. In other words, ensuring that the details’ format is correct: the number of characters, the bank code, the branch code, the account number, the key, whether the corresponding account exists in the institution indicated, the IBAN number, and finally the BIC or SWIFT code for making the transfer. The transfers can be made in complete security if all information is valid.

There are various solutions available to help businesses secure their payments.

Several sites offer to check the existence of an IBAN, the country to which the account is linked, and its bank.

In France, some banks also offer checks using SEPAmail DIAMOND such as BNP Paribas. Created on the initiative of 6 French banks (Banques Populaires – Caisses d’Epargne, Crédit Mutuel, BNP Paribas, Société Générale, Crédit Agricole), this solution checks a third party’s details against partner banks’ databases to authenticate an IBAN before making a transfer.

Finally, there are bank details verification solutions that can be used and integrated into all stages of the payment chain to optimize payment security. Sis ID offers a collaborative IBAN verification solution to secure transfers between professionals and protect them from transfer fraud.

All these solutions help to limit the risk of transfer fraud, but it is up to businesses to secure their payment process. Checking the IBAN, BIC, or SWIFT code, the identity of the beneficiary account holder, his bank, and the authenticity of his account ensures that money is transferred to the right beneficiary.

How can I avoid the IBAN scam?

To protect yourself from this type of scam, there are several best practices to put in place, including security processes to check suppliers’ bank details.

  • The first thing to do is to make a counter-call. When a new beneficiary is registered or the existing details are changed, this is the best way to check with the account holder where the transfers are being made. This can be a very time-consuming but safe action.

  • Set up verification processes before making money transfers and stick to them even in an emergency. Employees are often led to make mistakes, potentially to the advantage of fraudsters when the notion of urgency is used.

  • Increase the number of checks. Having bank details checked by several people from different departments ensures the information is authentic. For example, one person checks the beneficiary’s account and bank of residence, another checks the identity, another the IBAN, etc.

  • Training employees in the risk of fraud. By being aware of the different types of fraud, teams can recognize them and therefore thwart them.

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