How do bank codes work? (IFSC, swift/bic, IBAN)
Three codes, three continents, and each one is doing a slightly different job.
Why more than one system exists
Because each was built by a different authority to solve a different routing problem, and none of them was ever retired.
An IFSC is eleven characters identifying a bank branch within India. The first four are the bank, the fifth is always zero and reserved, and the last six identify the branch. It exists because Indian domestic rails route to branches.
A SWIFT code, also called a BIC, is eight or eleven characters identifying a financial institution internationally. Four for the bank, two for the country, two for the location, and optionally three more for a specific branch. It exists so that a message travelling through the international messaging network knows which institution to reach.
An IBAN goes further: it identifies not just the bank but the exact account, in a standardised format used across Europe, the Gulf, and a growing list of other countries. Two letters for the country, two check digits, then the domestic account details.
Why an IBAN is safer than the alternatives
The two check digits are the point. They are calculated from the rest of the number, which means a mistyped IBAN usually fails validation immediately rather than sending money to the wrong place.
IFSC and account number combinations have no such protection. A single wrong digit in an account number produces a technically valid instruction to pay a stranger, and recovering that money is difficult and sometimes impossible.
What you actually need, when
Sending within India: IFSC and account number. Sending to Europe or the Gulf: IBAN, and often the SWIFT code as well. Sending to the United States: routing number and account number. Receiving from abroad into India: your account number, IFSC, and your bank's SWIFT code.
A postcode narrows the area, a street address finds the building, and a flat number reaches the door. IFSC is the building, IBAN is the door, and SWIFT is the sorting office that knows which country the letter is going to.
Where you meet it
Every transfer form you have ever filled in, and every time an international payment took four days because one field was slightly wrong.