When looking for the safest ways to send money, sending your money via a bank transfer can be a convenient way to transfer your money either domestically or internationally, but it does require a certain level of trust in the person or organisation you are sending your money to, not to mention the institution you are relying on to transport your money.
Until you receive confirmation that your money has been safely received on the other end, it may not be explicitly clear what exactly is happening to your funds once they leave your account. Particularly for those making international transfers, that can be a worrying 5 to 7 working days wondering if your money is still safe.
Is it safe to pay by bank transfer?
Money transfers from your bank are usually a fast, safe, and convenient way of sending money. Provided care is taken that you are sending your money to a trusted recipient. Also, you need to make sure your bank is a good money transfer provider. Read on for a better overview of the rules and regulations banks and money transfer companies have in place to keep your money secure.
Your options for making safe bank transfers
Making a transfer with your bank
Credit and debit cards
Making an international bank transfer with Wise
Wise is one of our top recommended partners for international bank transfers, providing fast transfers to over 80 countries worldwide.
One of the biggest appeals of a money transfer provider like Wise is the company's low fees for sending money abroad and more competitive exchange rates than a traditional bank.
Bank transfer safety rules
In 2020, new bank transfer rules became law in order to protect customers further when making domestic wire transfers. Major banks are now required to have increased security checks known as ‘confirmation as payee’ - a measure that was first introduced in October 2018 but only became law on the 30th of June 2020.
The security measures mean that as well as requiring your recipient’s bank account and sort code for a domestic wire transfer, you are now also required to supply your recipient’s full name. If the name given does not match with the bank account on record, your bank will notify you before you make the transfer.
These rules come into place in order to tackle bank fraud scams, in which people would pose under someone else’s name in order to trick others into sending money. Major banks including First Direct, Halifax, Lloyds, RBS, Bangkok Bank, NatWest, Nationwide, Santander, and TSB have now implemented these additional measures.
2020 bank transfer regulations
You should note that these rules only apply to domestic bank transfers, not international transactions. For this reason, checking all of your details are correct and only sending to a trusted party is always recommended.
Bank transfer regulations
Banking regulations are constantly updated to meet the demands of modern changes and technological development. Here is a list of banking regulation trends that you can expect to see in the future:
Digital assets
Third-party risk management
Consumer protection
Anti-money laundering (AML) and compliance
Canadian Regulators
We created the following guides about some organizations to help customers by providing relevant information related to the process of sending money in Canada:
CDIC(Canada Deposit Insurance Corporation): it helps customers by ensuring their money always is protected.
FCAC(Financial Consumer Agency of Canada): ensures customers are protected by the laws against money transfer companies.
FINTRAC(Financial Transactions and Reports Analysis Centre of Canada): investigates and detects money laundering.
IIROC(Investment Industry Regulatory Organization of Canada): it is in charge of overseeing the trading activity and investments in the Canadian markets
PC(Payments Canada): also known as Canadian Payments Association, it makes sure the Canadian economic system is trustable.
Things that affect the safety of bank transfers
Incorrectly entered digits or information
It is of paramount importance that you check you have the correct information for your bank transfer before you initiate it. This includes checking the bank account number, sort code, IBAN/BIC, and the name of your recipient is all as it should be.
Your bank may not register that you have entered your details incorrectly until your funds have already left your account. This can lead to severe delays in getting your money refunded back to you before you can re-start your transfer - and will most likely mean you end up paying far more fees for a transfer than necessary.
Reversing wire transfers
Reversing a wire transfer can be very difficult, but is possible in some circumstances. As soon as you realize that you have accidentally sent money to the wrong account, notify your bank. The earlier you are able to notify your bank or transfer provider of a mistake, the more likely you are to have your funds returned to you. Your bank or remittance provider will work with the receiving bank to try to get your money back for you.
The good news is that the chances of you accidentally entering the wrong account details that actually line up with another person’s bank account are relatively slim - more realistically, the mistake will be picked up automatically by the institution you are using to send your funds and the money will bounce back to you.
SWIFT network
While the SWIFT system is considered secure and is used to transport billions across the world every day, it is not completely invulnerable to cyber hacks. The SWIFT network is considered a secure way for banks to send information to one another, including money transfer information. However, the network also means that this information can go through a number of institutions before it reaches your final destination, and the most stops, the higher the risk for your information to be intercepted.
With that said, the most important thing you can do to ensure your money stays safe when sending it via bank transfer is to verify that you are absolutely certain you have the correct information for your recipient and that you are sending your money to someone you trust before you initiate a transfer.
Transfer securely with money transfer providers
Money transfer providers are an alternative way to send money via bank transfer across the world. These companies are a popular alternative to traditional banks because they often have lower fees, better exchange rates, and faster transfer times, but an understandable concern is how they keep your money safe.
Most reputable money transfer companies will be regulated by the Financial Conduct Authority (FCA). Operators that we recommend regulated by the FCA include TorFX, Wise, Currency Fair, WorldRemit, PaySend, and Xoom (plus many more). The FCA ensures that a transfer provider is legitimate and has the necessary security in place to provide safe money transfers.
In addition, most transfer providers will provide details of the additional security measures they have in place. For example, most transfer companies have encryption technology and multiple verification steps to protect your account and your money.
Bottom line: how safe are bank transfers?
As a method of sending money from one account to another, bank transfers are inherently safe. Human error is most likely to play the biggest part in your transfer going wrong, so here are a couple of key takeaways to ensure your transfers are hassle-free:
Always ensure you trust the person or organization you are sending money by bank transfer to
Double-check that you have the correct information for your recipient, including the account and sort number
If you are sending money to someone you don't know, consider an alternative method such as using your credit card which gives you additional protection
Cheaper alternatives to bank transfers
Bank transfers do not provide the best value for sending money internationally. In most cases, banks charge some additional fees and markups that make international bank transfers more expensive.
If you would like to learn more, you can check the following bank guides depending on where you are sending money from and which bank you are using:
If you are sending money from the US, you can use Wells Fargo (see Wells Fargo exchange rates and fees), Regions Bank (check Regions Bank exchange rates and fees), or Bank of America (view Bank of America exchange rates and fees).
If you are sending money from Canada you can use TD Canada Trust (see TD Canada Trust exchange rates and fees), or CIBC (check CIBC exchange rates and fees).
If you are sending money from India, you can use ICICI Bank (see ICICI exchange rates and fees).
If you are sending money from another part of the world you can use Citibank (see Citibank exchange rates and fees) or Standard Chartered (check Standard Chartered exchange rates and fees).
*You should have an account to send money via the banks mentioned above.
Switch over to specialist transfer providers to save money on fees and currency conversions. Take the time to check out the live rates of money transfer companies using our comparison engine. Shop around to get the best deal and you will save large sums of money compared to banks.