Our clients often complain that they are having to provide inside leg measurments to open a new bank account and the time that it takes. We have identified 5 major issues and common mistakes to avoid for a smoother banking experience:
1. Regulatory Compliance
Ensuring compliance with regulations is crucial. This involves detailed background checks and extensive documentation. Ignoring regulatory requirements can result in account rejection, or worse, an unexpected closure letter.
We are often contacted by Trustees in receipt of one of these closure letters.
2. Documentation - Less is more!
The trick is to stay focused on what is relevant. Throwing the kitchen sink at your relationship manager will not necessarily get a bank account opened any sooner.
3. Commerciality -What's in it for the Bank?
Trustees typically bill time. Banks DO NOT.
Equally, an electronic money institution (EMI) is not a Bank. They both play an important role in the world of payments, but a Trustee should never confuse the two. Banks commit significant regulatory capital to be in business.
An EMI will almost always need a Bank to provide the IBAN. Not all banks are relevant to the needs of the Trust Industry.
Hence, consider the commercial aspects of the relationship from the Bank’s perspective.
4. Beneficial Ownership Information
Banks need to determine the ultimate owner of an entity. Failure to provide clear,concise and accurate beneficial ownership information can result in rejection.
Use diagrams or charts if necessary to clarify complex structures and transactions. There are some great AI tools that do this quickly. Each bank has a different set of requirements. We can assist in preparing detailed and clear beneficial ownership information to meet bank requirements.
With regards to geographical focus, there are European Banks that prefer Emerging Markets and Asian Banks that prefer G7.
5. Back-up plan
Finally, build resilience into your Banking relationships, and where possible, open two Bank accounts for each structure. ikyc maintains relationships with over 30 such banks to facilitate a smoother account opening processes.
For example, we recently assisted a complex structure with over 40 entities centralise their banking with a new bank.
Conclusion
By being aware of these challenges and taking proactive measures against common errors, trustees, fund administrators and corporate service providers can increase their chances of successfully opening and maintaining bank accounts.
Developing good relationships with banks and effectively using technology can also be instrumental in overcoming these barriers.
We specialise in opening bank accounts for complex strutures. We have strong relationships with over 30 banks and our team has been doing this since 2012.
For expert assistance in navigating these challenges and opening a bank account promptly, please get in touch: raj@ikyc.com
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