3 Reasons Why Processing Wires Manually Is Crippling Your Institution

Is your financial institution still processing wires manually? If so, consider the hidden costs and risks you’re accepting. Manual wire processing is among the most inefficient processes in banking operations, costing you far more than adopting a good software solution for wires.

And wires are an increasingly important aspect of your business, according to a recent article in PaymentsJournal: “Wires represented 85% of all value transfers in 2019, and have seen year-over-year growth even amid the COVID-19 pandemic, during which there has been a sharp decline in check usage.” (Why—and How—Banks Should Be Modernizing Wire Transfers, Oct. 5, 2020)

Here are three ways manual wire processing is hurting your business:

• the human factor,
• compliance concerns, and
• fraud risk.

Let’s take a deeper look.

The Human Factor

It’s no surprise that, even with the best training and intentions, people make mistakes. The more human intervention is involved in any process, the more chance for error. And when wiring money, those errors can be costly because wired amounts are often very large and because wires aren’t reversible.

A software wire system never gets tired or distracted. It can also prevent errors by automating parts of the wire process such as:

• validating ABA routing numbers,
• auto-populating wire instruction information to eliminate incorrect data entry,
• enforcing business rules to ensure proper and complete entry,
• integrating with FedLine for both incoming and outbound wires, and
• enabling the creation of wire templates for recurring transactions.

Manual wire processing is also slow, costing your employees many tedious hours. By using software to automate the wire process, you can quickly increase your wire activity without hiring more staff and bring additional savings to your financial institution.

Compliance

You know that ensuring your institution’s compliance is critical when transferring funds between institutions. And without a system to help you, staying current with regulations regarding wires requires employees—typically managers—to invest many hours.

A good software solution simplifies auditing and reduces compliance risk by doing the following:

• automatically updating to the latest regulation changes as they come out,
• creating a clear trail for auditors, and
• flagging transactions that may match an OFAC SDN list.

Fraud Risk

A manual wire transfer process must be documented and rigorously followed. To prevent fraud, account holders may set limits on how much money can be transferred in a day or establish other rules. How will your institution ensure that each account holder’s rules are followed without fail? One error can cost you money, a customer, and trust.

With a good wire transfer software solution, you can protect your institution and account holders from fraud in the following ways:

• Assign limits on the number and value of transactions according to each account holder’s rules.
• Automatically send alerts for any wire attempt above those limits.
• Automatically check OFAC lists.
• Set up two-factor authentication.

Conclusion

Human error and hours invested, changing regulations, and increasing wire fraud make manual wire processing expensive and risky. If your institution continues to process wires manually, it makes sense to assess the real costs involved. As more institutions switch to efficient automated wire processing, can you afford to fall behind your competition?

Are you looking for a new wire system? Click the button below to see if our wire system is the right fit for your institution.