I was considering whether to build a bank which uses a city slot.
Isn't there an alternative solution to transfer money?

Suppose you wanted to transfer 100 gold to a player.

You get them to put 1 timber in the market at 103 gold (about 3 gold appears to be the going rate for timber?)

Then you buy it - I assume nobody else would be stupid enough to buy at that rate.

The downside is you would use up a caravan slot, but you could tag the money onto a real trade.
The upside is you gain a city slot for machinery.

Maybe there is some other reason to build a bank?
I just started and haven't built one yet so I'm not sure what it really does.

Funds that are in your bank's account can't be plundered. And it's easier to pay someone - you don't have to ask a person to set up the transfer deal, etc.
No other reasons. I don't think you need a bank at the start. Later on, when you have 3 Metros and lots of available slots - you can build a bank.

On the topic of banks, if I build one in each of my cities, can I transfer money from one to another without having to send a hero/transport carrying them? Does it take time, or is it an instant transaction?

Does that mean there is bank account associated with the player rather than the bank/city? I assume you can't just destroy the bank with a cannon and then plunder its contents.

Yes.



Instant.



Yes.



Can destroy but can`t plunder content.