Sort Codes
A sort code is a type of routing number used in the United Kingdom and in Ireland. It’s composed of six digits divided into three pairs. It routes money transfers by identifying the banks involved, as well as the location of the specific branches where the accounts are held.
What are the origins of sort codes?
Sort codes came about in the late twentieth century when check usage was at an all-time high. Consumers wrote checks throughout the day to make their purchases and gave them to merchants. Merchants would then be responsible for cashing the checks in for their business. They did this by bringing checks to the bank so they could be properly processed—but they had to figure out ways to authenticate where the checks came from.
Sort codes identified the specific bank branch that the account holder was writing their checks from, allowing everyone involved in the wiring process to be aware of where the money came from, and where it was going.
How do sort codes work?
Each pair of numbers in a sort code points to a different piece of information needed for a successful money transfer. The first two digits refer to the banking group or bank that the check is coming from. The remaining digits help narrow it down to the very branch.
For example, let’s say that there’s a sort code that goes by 11-22-33. Numbers 11 would represent Berry Bank, while 22 and 33 would reveal the city and branch of Berry Bank which can be found in Camdentown, London.
It’s important to note that while sort codes are often used alongside account numbers, they each have a different function. Simply put, account numbers identify an individual’s savings or checking account. Sort codes make sure that with whatever transaction that occurs, a bank will correctly move money over from one account to another.
How are sort codes different from SWIFT codes?
When it comes to processing secure bank transactions, both sort codes and SWIFT codes function similarly. Like sort codes, SWIFT codes have their own routing number combinations and are used to determine what banks and branches are involved in the wiring process.
But while sort codes exist for banks within the UK, SWIFT codes are not limited by location. They monitor money on a much bigger scale, allowing for international transfers. SWIFT codes consist of 8-11 unique characters that serve to identify not only the banks and branches, but also the countries where the transactions are taking place.
Core Banking Systems
Core Banking Systems are codes that ensure accuracy of transactions.