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4 Ways to transfer money from one bank to another – What to keep in mind

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Lyle Solomon

 

The days of returning money in cash to a friend or relative are long gone. Several easy solutions are available for moving those monies from one bank to another. In this post, we will discuss that and more.

 

How can you transfer money from one bank to another?

You may need to transfer money from one bank to another for various reasons. For instance, you may need to transfer money to the creditor for credit card debt settlement. Or you may need to transfer money to a friend urgently. But how can you do it and that too fast? Let’s find out.

Lyle D Solomon

 

Wire transfers

One of the fastest ways to send money electronically between two people is through a wire transfer, which can be done through a bank or a nonbank provider.

You’ll need the routing number, account number, recipient’s name, and maybe the recipient’s address for a domestic wire transfer. You can arrange a domestic wire transfer online or in person at a branch or office.

While speedy and possibly allowing you to send more money than other ways, wire transfers can also be pricey.

Remember that wire transfers cannot be sent on weekends or bank holidays and may have a weekday deadline set by your bank.

 

 Internal Electronic Fund Transfers

It is easy to transfer money between accounts if you have more than one at the same bank, such as a checking account and a savings account. It’s called an “internal transfer” in this case. Look for methods to transfer money on your bank’s website or mobile app. You may typically set up a one-time or recurring transfer between related accounts, and most internal transfers settle instantly or within one business day.

 

External Electronic Funds Transfer

Let’s say your checking account is at one bank while your online savings account is at another. You can establish an “external transfer” by linking your savings and checking accounts. You usually need both your account number and the routing number of the external bank to transfer money to an external account. After they’ve been linked, you can transfer money between the accounts whenever you’d like.

 

Paper checks

Writing a check and depositing it at a bank branch, online, via a mobile app, or by mail is a conventional method for transferring money between banks. An official cashier’s check can be used to transfer money and is deposited similarly to a regular check.

 

Peer-to-Peer Transfers

Online P2P payment platforms like PayPal, Venmo, Zelle, Cash App, and others are available nowadays. These tools can be helpful if you need to send money to someone or your bank does not provide bank-to-bank transfers.

Your checking account and routing information must be used to link your bank account to the payment app or service to create the accounts. For instance, while using PayPal, the money you send is automatically taken out of your bank account.

Following that, PayPal transfers this cash to the recipient’s PayPal account. The recipient can then use PayPal to make purchases or send the funds to their bank account.

 

Email Money Transfer

Using an individual’s email address, money can be sent and received using this manner. The involved banks email the recipients to inform them of the transfer before using a secure fund transfer network to transmit the funds. One of the most popular systems for email money transfers is Venmo, which is utilized alongside Zelle, Apple Pay, and Google Pay.

 

Cash transfer 

Even though most banking is now done digitally, a straightforward cash transfer is still a viable option. Even if it doesn’t always make sense to withdraw and deposit cash, such as when moving enormous sums of money, there are some situations where it might be a convenient and cost-effective option. Cash can also be viable if you need to move the funds immediately.

Your best option is to make a cash withdrawal in person at a branch of your local bank or credit union to avoid fees. You can be charged a transaction fee by your banks or the bank that operates the ATM if you use it.

 

Are there fees involved?

On average, wire transfer costs range from $25 to $30 for transfers to US bank accounts and $45 to $50 for transfers outside the country. Additionally, if you are receiving money, there may be fees. Some banks charge a fee for wired funds, while others don’t.

Generally speaking, online transfers are free. However, some banking institutions may charge fees.

 

What’s the fastest method of doing this? 

There isn’t a single response to this query because it will vary according to your bank, the destination country, and the amount of money you want to send. The quickest choices are typically wire transfers or online applications. You can consider the following payment options:

Zell – You can access Zelle online or through a mobile app. You may quickly link to your bank account for quick transfers because it has partnerships with most US banks, including Bank of America, Chase, Citibank, and Wells Fargo.

PayPal – PayPal is also another well-liked choice. Although sending money from one PayPal account to another is almost immediate, sending money between banks may not be the fastest method.

 

Venmo – A peer-to-peer app that is partnered with PayPal and made to facilitate transfers is called Venmo. Users can be added as contacts so that you can quickly and effectively pay money to them.

 

Western Union – Western Union, is the most widely used choice when sending money online through wire transfers. The funds will be transferred immediately into the recipients’ bank accounts.

One of the apps mentioned above is your best option if you need to transmit money quickly. Check whether your bank already has an app for quick money transfers since many of these are associated with banks. Be careful to evaluate fees, especially if sending money to foreign bank accounts or utilizing several currencies. To keep your banking information secure, you should also be careful to create a strong password and PIN.

A bank-to-bank transfer can be your best option if you need to move money between two of your accounts. This digital transaction often functions as an ACH transaction.

Many banks enable free bank-to-bank transfers if you send money to another account you own. Just connect the two accounts, that’s all. Typically, you can do this via your bank’s online banking system. Some banks require you to phone or go to a branch, especially those with a small internet presence.

You’ll need the account numbers, routing numbers, and documentation proving your ownership of both accounts to link two accounts. After you establish the connection, sending money between the two banks will be simple.

 

What should you remember when transferring money from one bank to another?

There are a few things you must keep in mind when transferring money from one bank to another. Here are a few of them.

 

Consider speed: Determine how soon the funds must reach the other bank.

The time it takes for the money to flow can range from a few seconds to many days, depending on the type of bank transfer.

 

Check out the fees: A wire transfer may occasionally be a good option for quickly sending significant sums of money, although it won’t be free. Other techniques, like Zelle, can be quick and cost nothing.

 

Recheck the recipient’s bank account details: You’ll likely need, at the very least, the recipient’s name, cell phone number, and account number. On the other hand, Zelle merely requires the user’s phone number or email address.

 

Check out the savings withdrawal restrictions:  A rule limiting the number of transactions and withdrawals from savings deposit accounts was removed by the Federal Reserve in April 2020.

The number of transactions in these accounts may be limited by your bank, even though this requirement is no longer necessary. Going above your bank’s withdrawal limitations may incur charges.

 

Conclusion 

A quick and simple way to move money from one account to another is through an external transfer. It’s crucial to examine your options so that you are aware of their costs and the time to transfer money.

 

 

 

 

Banking

Poor software testing puts banks at high risk of IT failures

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 Sune Engsig, VP Product at Leapwork

 

IT failures have plagued the banking industry for several years. From the TSB computer systems meltdown in 2018 costing the bank £330m and causing 80,000 customers to switch to a competitor, to Lloyds, Halifax and Bank of Scotland suffering an IT glitch on payday this year with customers’ faster payments and transfers being delayed.

Despite MPs calling for regulators to act, condemning the number of IT failures in the financial services sector as ‘unacceptable,’ the industry continues to let them happen leaving more and more irate customers locked out of their accounts. But with bank branches disappearing fast, customers are now far more reliant on online and mobile banking, so ensuring technology systems function correctly is paramount.  When you consider the complex compliance and regulatory setup of banks and other financial institutions, and the fact that they are dealing with incredibly sensitive customer information, those that do experience outages can face irreversible consequences such as loss of customer loyalty, severe reputational damage and regulatory fines.

A critical step in mitigating IT failures is having effective testing capabilities in place to find and fix any errors before new software is rolled out to market or new IT migrations take place. This lowers the risk of software failures and outages occurring after launch. Yet, 70% of software testers in banking and financial services think it’s acceptable to release software that hasn’t been properly tested, so long as it’s patched later, according to research by Leapwork. Furthermore, only 40% think software failures are a big risk to their company. But when the impact of an IT failure is so severe, why do banks still take risks?

 

Software testing challenges

Despite the swathes of software businesses now rely upon, 85% of software testing is still done manually. When it comes to the banking sector, as these institutions continue to develop new digitised products and services with increasingly sophisticated and customised software, it is clear that manual testing can no longer be the default. It is time-consuming, cannot scale amidst a skills crisis, and leaves companies open to human error.

There is a huge amount of pressure on IT teams to develop and release new software or manage new IT migrations. A critical step on this journey is having effective testing capabilities in place, like test automation, to find and fix any errors and bugs before new software is rolled out to market. This lowers the risk of outages and failures occurring after launch, which can negatively impact a company’s reputation and bottom line.

However, while some organisations recognise the value of automation tools, many continue to rely too heavily on code-dependant tools which, while an improvement on manual testing, are incredibly complicated to use and thus require specific skills and experience to operate. This means they too are impossible to scale, as they often depend upon developer skills.

 

Skills shortage forcing banks to take risks

Ensuring you undertake proper software testing seems like a no-brainer, but 40% of software goes to market without sufficient testing. The reason why; one in five (21%) of banking and financial services testers say ‘lack of available skilled developers.’ As companies transition from manual to automated testing, which typically requires coding skills, the major global developer skills shortage is creating bottlenecks, increasing costs and delaying project delivery times as development teams try to upskill manual testers, hire new talent or lean on existing developers.

As a result of the skills shortage, only 30% of testers in banking and financial services say they’re using some element of automation (i.e., an automation tool or a combination of manual and automation). In fact, 40% of CEOs across all industries think the fact that their company still relies on manual testing is the main reason why software isn’t tested properly, with 58% of testers in banking and financial services saying ‘underinvestment in test automation’ is the reason sufficient testing does not occur.

 

Testing issues not on CEOs’ agenda until too late

Across all sectors, 69% of CEOs think it’s acceptable to release software that hasn’t been properly tested, so long as it’s patched later, but 68% of testers claim their teams spend five to 10 days per year patching software. While nearly all testers express concern that insufficiently tested software is going to market, the overwhelming majority (75%) of CEOs say they’re confident their software is tested regularly. These numbers show a huge disconnect between CEOs and testers indicating that testing issues are falling under the radar and not being escalated until it’s too late.

 

Moving toward an automated future

Banking and financial services have been thought of as slow-moving and lacking innovation in the past. That isn’t the case anymore, as we’ve seen the industry take great strides towards digitalisation in recent years. However, with that digital transformation and integration of software comes outages, the consequences of which mean millions of pounds lost.

UK banks are at high risk of IT failures due to insufficient software testing, and a reliance on manual testing. On the current trajectory, more and more banks will struggle with failures and outages which could cost them a significant amount in financial and reputational damage. To minimise risk, they need to transition from manual to automated testing and explore testing options that don’t require coding skills so it’s easier to hire in talent or upskill existing team members, whether that be testers or everyday business users. Only then can they increase productivity and time to market while decreasing risk and costs.

 

 

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Banking

How banks can increase customer acquisition and user engagement with sustainability

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By Karolina Szweda, Head of Growth Marketing at Connect Earth

Young people are demanding more innovation from traditional financial institutions, and are primarily in favour of lower costs and more flexible digital customer experience promised by challenger banks and other FinTech providers. The future of banking is digital, and traditional financial institutions are well aware that they need to embrace innovation to remain competitive in the digitalised market.

In order to win over the younger generations, especially Millennials and Gen Z, banks need to invest in their digital transformation and deliver more customer-centric solutions. One of the affordable low-hanging fruits is sustainability.

As the public’s attention to the climate crisis grows, consumers and businesses are increasingly interested in reducing their negative impact on the planet. BCG reports that as much as 73% of consumers are altering spending habits because of climate change, and, according to PwC, 88% of consumers want brands to help them live more sustainably. As far as businesses are concerned, they are increasingly aware of the mandatory disclosure regulations set to take effect within the next years in major economies, and the need for carbon emissions reporting.

The problem is that the vast majority of consumers and businesses do not have access to actionable data on their carbon emissions. We believe that this is where banks can step in.

Increasing customer acquisition and retention

According to Deloitte, 71% of customers are more likely to choose a bank with a positive environmental impact. In addition, Global Risk Regulator reports that 93% of people expect sustainable financial services to become the norm, and according to Tink, 62% of consumers want their bank to show them an overview of their carbon footprint.

Banks are in a unique position to respond to this increasing demand by embedding climate data in their financial services offerings, which can help attract new customers and improve brand loyalty on a large scale.

With a carbon tracking API solution integrated into a digital banking app, financial institutions can be a catalyst for change and enable their customers to understand how they can reduce their emissions. By providing carbon emissions data for each financial transaction, banks can support and encourage their retail banking clients, corporate clients and/or retail investors to act more sustainably, while also increasing customer acquisition and digital engagement.

Most importantly, banks can also measure how their customers’ spending behaviours are changing as a result of being exposed to climate-related information, which they can use to segment and understand their customers better.

Increasing digital engagement

According to EY, 61% of consumers want to access more information that can help them make better sustainable choices. Banks are in a position to empower customers to do exactly that, whilst increasing user engagement with their digital banking apps.

Educating consumers on how to make more sustainable choices can be achieved through gamification, personalised recommendations and rewards to encourage behavioural change. The analysis of spending data along with tailored educational content can enable consumers to analyse, learn and improve their consumption habits and empower them to act on this knowledge.

Before accessing their carbon emissions insights, users can enter their custom information about their lifestyle habits, such as diet (meat-based vs. plant-based), daily means of transportation (car vs. bus) and more. Machine learning models improve as users input data over time, making carbon emissions estimates more granular. The model is trained to support thousands of different user types based on their profile and enables the bank to customise the experience and gamify the emissions reduction process for users.

How banks’ customers can benefit from accessing carbon emissions data

As far as climate action is concerned, having a real-life overview of one’s carbon footprint can be a true game changer for millions of consumers worldwide. Access to carbon data increases climate change awareness and empowers people to make a real difference.

Earlier this year, our team at Connect Earth confirmed the partnership with KBC Bank in Bulgaria to help them drive customer engagement and provide their retail banking clients with climate insights into their spending. We aimed to bolster KBC Bank’s corporate sustainability strategy, whilst meeting increasing demand from climate-conscious clients.

The financial sector has historically lacked the infrastructure to support sustainable finance in a tangible way. We are happy to report that the green transition has begun.

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