FXcompared Launches Industry-First International Money Transfer Index™
Index provides greater transparency for the industry and for customers when sending money abroad
LONDON, 19th November, 2015 - FXcompared, the independent money transfer research and comparison group, today 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.
Monthly data has been collected on international currency transfers via banks in the UK, the U.S., Canada and Australia since April 2015. FXcompared collects data from each bank by telephone, online and in person in the branches. This includes two specific types of information relating to the cost of transferring money: the service fees banks charge for transferring currency and the actual exchange rate the customer will be given for the size of their transaction. This information is weighted by the bank’s market share of domestic deposits.
The non-bank provider data is weighted based on information for brokers listed on FXcompared – effectively the leading money transfer providers globally.
About FXcompared
FXcompared is an independent online service that enables individuals and SMEs to compare international money transfer companies. FXcompared Intelligence provides industry leading insight, analysis and learning on the international foreign exchange markets.
Media contact:
John Merva
Aspectus
Email: fxcompared@aspectuspr.com
Tel: +44 (0) 20 7242 8867