Banks implementing revised IBAN rules from October, affecting all banking customers with potential changes to transactions
Starting October 2025, a new enhanced International Bank Account Number (IBAN) regulation will be implemented across Europe to bolster security in money transfers. However, notable exceptions to this regulation are the United Kingdom (UK) and Switzerland, who will not be participating due to their non-membership in the European Union (EU).
Since Brexit, the UK is no longer bound by EU regulations, including the updated IBAN security standards. Instead, the UK continues to operate under its own financial regulatory framework and has its own plans for enhanced payment messaging standards, such as ISO 20022. Switzerland, too, is not an EU member and has implemented its own payment modernization initiatives, like the Swiss QR bill system, which enhances domestic payment security and efficiency.
The exclusion of the UK and Switzerland from the IBAN regulation is not a direct stance on payment security, but rather a reflection of their political and regulatory independence. Both countries maintain sovereignty over their banking regulations, allowing them to choose frameworks that best suit their national financial ecosystems.
In an effort to protect consumers from money transfer fraud, a new traffic light system will be introduced as part of the IBAN regulation. This system will show whether the IBAN actually belongs to the money transfer recipient, both online and at the counter. If the traffic light shows "Green," the money transfer is secure. A "Yellow" light may indicate a typing error or swapped first and last names, while a "Red" light will trigger a warning, and the money transfer should be checked again.
From October 2025, it will no longer be possible for fraudsters to use a known name but a false IBAN. The new regulation will involve a data check for money transfers, helping to combat fraud caused by fake invoices, manipulated account data, or various fraud schemes.
Despite the new regulation, transfers to the UK and Switzerland will not have the extra protection provided by the IBAN regulation. Consumers have been increasingly falling victim to money transfer fraud, making the need for secure payment systems more critical than ever. It is essential for individuals and businesses to remain vigilant and take necessary precautions when transferring funds, especially when dealing with non-EU countries.
[1] https://www.bankofengland.co.uk/financial-stability/payments-and-market-infrastructures/iban-changes [2] https://www.fca.org.uk/news/press-releases/fca-reminds-firms-iban-changes-october-2025 [3] https://www.snb.ch/en/econ/payment/system/2020/ebcs [5] https://www.bankofengland.co.uk/financial-stability/payments-and-market-infrastructures/iban-changes-and-iso-20022-migration
The United Kingdom, no longer bound by EU regulations, will continue to operate under its own financial regulatory framework, such as ISO 20022, after the implementation of the enhanced IBAN regulation in October 2025. Switzerland, also not an EU member, has implemented its own payment modernization initiatives, like the Swiss QR bill system, which enhances domestic payment security and efficiency.
