Gibraltar: Why Can’t Mickey Mouse Get A Bank Account These Days?
When I first joined our company in 1999, introducing clients companies to both on-shore high street banks and offshore international banks was easy. Most banks only needed a short business description and a copy of the signatories’ passport – the joke back then was you could open an account in the name of Mickey Mouse if you wanted!
Of course the joke is on us now, because that has dramatically changed, and whilst we all complain about the changes, the world is probably the better for them.
The changes started after the devastating event of 9/11, where, we are told, the terrorist activities were funded by accounts owned by anonymous “Mickey Mouse” signatories, who when traced, lead to dead ends.
So banks had to improve their compliance requirements and we all started to get used to terms such as Due Diligence (DD) and Know Your Customer (KYC). Gone were the days of opening accounts in Grandma’s name, because pattern of business and business history of the client also became important.
To make matters worse for anyone wanting to open a new business, banks started to be heavily fined for insufficient compliance regulation and poor practice – millions, in fact billions in fines have been levied at nearly all the major banking institutions in the last 5 years – to the point that they are all so afraid to accept new business.
Worse still, the mainstream high street banks are also undertaking a whole review of long standing accounts that have been with them for years, even accounts that caused no problems or issues – but now they are examining each one individually and many are found to be too high risk for their low risk appetite.
So where are we now in 2016?
On-shore banking with mainstream banks is practically impossible – there are no experienced bank managers anymore, who understand when you describe your business plans – now you fill in a form, tick some boxes and hope that you pass their first line of defence, if you are lucky. Then stage two of your application is handled by an actual person, who may or may not meet you, and stage three is like mounting a full stage assault on a medieval castle! Where you need weeks of preparation, hordes of men to man the battering ram and plenty of stones to throw in a month long siege of forms, paperwork, questions and more questions, and all you want to do is open an account to sell shoes on line!
So many people are turning to overseas international banks, in the hope that they are less risk averse and easier to deal with.
But how true is that assumption?
The answer is – There are no easy applications for a bank account – but there are banks that still want your business, so they will try and work with you, rather than against you.
The trick is to work with people who have a good understanding of what your business model entails, and who you trade with and what your plans for the future are. They should also, and just as importantly, know what the banks they work with need from you, so that instead of you choosing bank after bank, and going through the process and then being rejected, you can at least narrow down your options to 2 or 3 banks that would be happy to help you….. or at the very least, tell you the truth from the beginning if they cannot place your account.
At Octopus International Business Services Ltd, we have 17 years’ experience in the minefield of Bank Introductions – we will NOT guarantee that we can get you or your company a bank account, because we do not tell lies… Because some businesses just are not acceptable to any banks, be they in UK, Latvia, Cayman Islands, Mauritius, New Zealand, Panama, Dubai or Timbuctoo!. Each application has to be taken on its own merits, the client and the business activities are evaluated and risk assessed, in order to match the application to the various banks wish lists. That done, we will narrow down the options and let the client decide which of our international banks they would like the application to run with, that way we maintain over 95% success rate.
So Mickey Mouse cannot get a bank account anymore. But Snow White, with her gang of Dwarfs to hold her hand throughout the process certainly can.