How to choose a safe and reliable bank

Choosing a bank is not always an easy and obvious operation. How do you select the right and safest credit institution for managing your money among all those available?

To answer this question you need a valid evaluation method, financial and non-financial data on the bank, clarity on the needs considered priority for opening an account, managing savings or investing.

Reliability, efficiency in services, digital innovation, convenience are some of the essential characteristics that are sought in a bank. But how do you identify them?

Today there is also an additional factor to consider: the ability or otherwise of a credit institution to operate online with cutting-edge security systems and intuitive steps. Nowadays, many banking operations that were previously carried out at the physical counter can be resolved via app or by connecting to the bank website with a simple account.

There are many factors to consider when choosing a bank. Below is advice on how to choose a safe and reliable bank.

How to choose a bank? Factors to consider

A bank today offers many services, in addition to guaranteeing the integrity of personal assets. This is why different variables must be taken into account in the evaluation:

Financial Strength

• Credit rating: check the ratings of agencies such as Moody’s, Standard & Poor’s or Fitch. A high rating indicates financial stability.
• Capital strength ratios: look for information on CET1 (Common Equity Tier 1), which measures the bank’s ability to deal with economic crises. A CET1 above 10% is generally considered good.
• Balance sheets and annual reports: if available, take a look at the balance sheets to understand the economic situation of the bank.
• Assets and Liabilities: Check the quality of assets (credit granted) and the level of liabilities (debts) to understand if the bank is exposed to high risks.

Reputation and Trustworthiness

• Customer Feedback: Read online reviews and rate user experiences.
• Bank History: A long history of operations without insolvency problems is a good sign.
• Supervisory Authority: Make sure the bank is regulated by the ECB (for European systemically important banks).
• Regulatory Compliance: Check if the bank complies with national and European regulations, such as the PSD2 Directive for the security of online payments.

Technology and Security

• Digital Security: Check if the bank uses two-factor authentication (2FA) and advanced encryption systems to protect your data.
• Online Services: If you use online banking, make sure the platform is reliable and intuitive.

Costs and Services

• Commissions: Check the costs of managing your current account, withdrawals, transfers and credit cards.
• Customer Service: The availability and effectiveness of customer service can be crucial in the event of problems.

Type of Bank: Traditional, online or cooperative banks can have different advantages.

How to evaluate the financial security of the bank?

In the area of solidity, for example, it is useful to be able to consult key data on the stability and financial security of an institution.

In addition to the aforementioned CET1 Ratio (Common Equity Tier 1) which measures capital strength (a value above 10-12% is generally considered positive), we can mention:

• Ratio between bad debts and total loans: the lower the value, the better;
• Ratio between loans and deposits: a ratio that is too high may indicate low liquidity;
• LCR (Liquidity Coverage Ratio): measures the bank’s ability to cope with short-term cash outflows. A value above 100% is positive;
• NSFR (Net Stable Funding Ratio): measures the stability of long-term financing

A bank for every need

Choosing the safest bank also involves a careful evaluation of your needs. What services do I really need? Do I prefer to manage my account and banking operations online or at the counter? Am I looking for favorable conditions to obtain financing or take out a mortgage?

Asking yourself these questions is essential to choosing the credit institution that best suits your needs. Here are some examples:

If you are a student or young worker

• What to look for: zero-fee accounts, free withdrawals, intuitive mobile banking apps;
• Useful services: free debit cards, commission-free transfers, discounts on events or agreements;
• Examples: youth accounts or online accounts with total digital management.

If you are a professional or self-employed worker

• What to look for: business accounts with dedicated services, such as international payment management and POS;
• Useful services: financial advice, access to credit, financing for entrepreneurial activities;
• Examples: banks with advanced business banking services or fintech platforms

If you are looking for security and savings

• What to look for: solid banks, with a good financial rating and members of the FITD (Interbank Deposit Protection Fund).
• Useful services: guaranteed return deposit accounts, bank bonds, asset management;
• Examples: traditional banks and historic banking institutions

If you need financing or mortgages

• What to look for: competitive interest rates, flexible installments, personalized advice;
• Useful services: access to personal loans, fixed or variable rate mortgages, lines of credit;
• Examples: Banks specializing in mortgages and loans with dedicated offers

If you want to make investments

• What to look for: access to global financial markets, online trading platforms, investment advice;
• Useful services: mutual funds, ETFs, advanced trading accounts;
• Examples: investment banks or specialized fintech platforms

If you travel abroad often

• What to look for: no fees on international withdrawals, multi-currency cards, global assistance.
• Useful services: international payment circuits (VISA, Mastercard), possibility of foreign currency accounts.
• Examples: online banks with international coverage or multi-currency accounts

If you prefer online banking

• What to look for: digital banks with intuitive apps, online customer support, low management costs;
• Useful services: push notifications for transactions, integrated expense management, quick access to movements;
• Examples: Neobank or challenger banks such as Revolut, N26, Fineco

If you prioritize Personal Relationships

• What to look for: nearby physical branches, dedicated consultants, personalized customer service;
• Useful services: direct advice on investments and complex banking products;
• Examples: traditional banks with a widespread network of branches

Bank and investment opportunities, how to choose?

Choosing the best bank for investment opportunities depends on your specific needs, your risk profile and your financial goals.

What are the investment tools offered by credit institutions and should be evaluated? Among these, the following stand out:

• mutual funds;
• Capital Accumulation Plans, which often allow you to periodically invest small sums, starting from 50 euros, to build up capital over time;
• bonds and certificates;
• insurance investment products

Original article published on Money.it Italy. Original title: Come scegliere una banca sicura e affidabile