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Banking challenges you need to consider when doing business in the UK

The banking industry has experienced considerable change over the years – from dealing with the aftermath of the 2008 financial crisis and the COVID-19 pandemic, to the move towards a more digital operating model. And, particularly in the UK, being one of the largest financial centres in the world, the industry continues to evolve but faces new challenges within the banking sector.


In this article, Raj David sets out the challenges you may face when it comes to banking in the UK and how you can make the process of opening a bank account easier and running your business operations more seamless.


Opening a physical bank account


More and more, foreign investors or companies looking to establish a presence in the UK are having major issues when it comes to opening operational bank accounts. In some cases, it can take up to six months to open a physical bank account meaning that businesses can’t run their operations or undertake investments in the UK until the bank account has been established.


This results in a huge headache for companies wanting to do business in the fast-paced environment that we are operating in. Not only is a lot of non-billable time wasted, but it’s costly and requires good relationships with the major banks to be able to speed this process up.


To get around the challenges in the UK, some businesses are using their parent company bankers abroad which are often not practical for operational banking in the UK for matters such as payroll. This also poses a challenge both in terms of transactional costs and currency risk – in a lot of instances, companies are coming from the EURO zone, the U.S. or Asia.


On top of this, gaining the necessary approvals from the bank's new business committee and navigating the complexities of local regulations, like anti-money laundering, can also make the process even more difficult for companies looking to open their UK bank account.


Risk of using payment service providers


Many other companies are using payment service providers (PSPs). PSPs are third-party companies that assist businesses to accept electronic payments – acting as the intermediary.


This solution may not be ideal as they are not a real bank account and poses an additional layer of counterparty risk when holding large balances in virtual accounts.

Many businesses choose to work with corporate service providers and/or lawyers and accountants to help with the process of opening bank accounts but these parties will also often face the same challenges for their clients.


In addition, these banking challenges do not just apply to businesses establishing their presence in the UK but also to fund managers making investments in the UK.


Overcoming the challenges


Considering the challenges and complexities that come with banking in the UK, working with a partner who has fostered strong relationships with major banks and has deep knowledge and experience in working with international structures and SPVs will be hugely advantageous.


ikyc specialise in providing comprehensive international corporate banking solutions, assisting corporate clients and fund managers establish their presence in the UK. We understand the difficulties you can face when it comes to opening bank accounts for your clients and have built strong relationships with over 30 international banks.

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We can open bank accounts in under four weeks (standard risk classification) and are experienced when it comes to pitching complex or enhanced risk relationships to banks.


With over 25 years’ experience in the industry, our team can support in key onshore and offshore locations including the UK, Jersey, Guernsey, Isle of Man, Singapore, BVI, Cayman, Monaco, and Switzerland.


If you are interested in finding out how we can help you and your clients open a UK bank account promptly, get in touch with us today.


Case study: How ikyc helped a PropCo structure set up a UK bank account promptly


We assisted a PropCo structure that held a residential property in the UK.


The property was let out to tenants but given the ownership by a foreign national, the PropCo could not open a UK bank account within a reasonable time frame. A non-UK bank account wasn’t an option as the cost for the tenants would have been far too significant, notwithstanding the currency issues they would face.


The trustees reached out to ikyc, and we were able to source a new equivalent bank quickly and within the required time frame for the client.

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