what is an intermediary bank

An intermediary bank is a third-party financial institution that facilitates transfers and transactions between two other banks, especially in the context of international wire transfers. It acts as a middleman between the issuing bank and the receiving bank, particularly when they are in different countries and do not have an established financial relationship. Intermediary banks play a crucial role in ensuring the smooth, speedy, and seamless cross-border payments by bridging the gap between two different bank accounts held by two different banks in different countries. They are often some of the largest and most well-known banks with connections to accounts and countries worldwide. Intermediary banks are typically involved in transactions that are more complicated and involve banks and financial institutions that are not accustomed to interacting with each other directly. They are essential for facilitating international transactions and play an important role in the movement of money across the world.