FXcomparedtoday launched the FXcompared International Money Transfer Index™ (IMTI™) – the industry’s most comprehensive index for monitoring the cost of using banks to send money abroad.
Key findings include:
UK banks offer better international money transfer rates than their counterparts in the U.S. and Australia. UK customers save, for example, about 36 per cent on a £10,000 transaction compared to sending the equivalent amount in Australia
UK banks charge an average of 3.6 per cent on a £10,000 transaction compared to an average of just 0.9 per cent charged by non-bank providers
The top 20 non-bank money transfer providers based in the UK now account for over £40 billion of foreign exchange per year, saving customers over £900 million annually based on FXcompared’s estimates.
The FXcompared IMTI™ incorporates international money transfer data from all major banks in the UK, U.S., Canada and Australia. The Index represents the average cost for a customer of transferring money through bank-to-bank channels for different transaction sizes (£1,000 and £10,000 in the UK). This data, which has been collected monthly since April 2015, has then been compared to the cost of using a non-bank provider, such as online-only services and foreign-exchange specialists, for transactions of the same value.
According to FXcompared managing director, Daniel Webber, “The FXcompared IMTI™ will provide greater transparency for a fast-changing, growing industry that is experiencing big technology shifts as non-bank providers become more prominent. As the international money transfer market continues to change, this type of data will support the market’s development and help banks, non-bank providers and customers better understand the industry and make more informed decisions about moving money overseas.”
The data shows that when UK customers transfer £10,000 abroad, the cost of using a bank is on average 3.6 per cent of the transaction, while the cost of using a typical non-bank provider is on average just 0.9 per cent. This means that for every £10,000 transferred internationally, UK customers are typically receiving just £9,640 worth of their foreign currency when using a bank, compared to £9,910 when using a non-bank provider.
However, by comparing UK banks with their international counterparts, the FXcompared IMTI™ highlights that UK customers save more on international money transfers than those in the U.S. and Australia. UK banks charge an average of 3.6 per cent on a £10,000 transaction compared to the 3.7 per cent charged by U.S. banks and 5.8 per cent by Australian financial institutions.
The FXcompared IMTI™ also shows that banks’ rates fluctuate from month-to-month. In August in the UK, for example, the cost of sending £10,000 was 2.3 per cent, moving to an eight month high of 4.2 per cent in October and then back down to 3.6 per cent in November.
Daniel Webber added: “The World Bank collects data for the lower-end of the consumer market, while the Bank for International Settlements covers the entire foreign exchange market. But – until now – there was an information vacuum for the ‘middle market’ – those making regular transfers in the region of £1,000 to £1 million. While our publicly released data focuses on transactions up to £10,000, we collect data for much higher value transactions as well. What this shows us is that non-bank providers, but also banks, charge less as customers transfer larger sums across borders. For example, the percentage cost charged by UK banks when sending £500,000 is typically 65 per cent cheaper compared to sending £10,000.”
The FXcompared IMTI™ will be updated every month and the data for £1,000 and £10,000 transactions will be released publicly on a quarterly basis. You can download the FXcompared IMTI™ report with more in-depth data analysis here.
Please contact FXcompared if you would like more information on the full dataset and report at IMTI@fxcompared.com.