Having a bank account abroad is a fundamental part of international diversification. You may want to have your assets offshore for peace of mind or you need to open a local bank account after a move to a new country for easier banking. Whatever your reason, you may soon realise that obtaining an account in a foreign bank is usually no walk in the park. Here’s why.
Climbing the Great Wall of Bureaucracy
The most common problem with opening a bank account abroad is failing to provide the bank with all the necessary paperwork. There is a long list of notarized documents the bank wants to have a look at, yet, as stated on most of the banks’ policies, presenting the necessary documents won’t still guarantee they’ll open an account for you.
The whole process of opening a bank account offshore can take you at least 3-4 weeks. That is, if you’re there to present all of your documents in person. If you are doing it all from overseas, you are looking at a far more time consuming endeavour. In some countries you can also hire an intermediate to take care of most of the bureaucracy for you, but as with all amenities, it will cost you and not little. Some banks also insist you have an address in that country. Without providing them with a local utility bill with your name and address on it, this is where your quest towards a foreign bank account ends. Without it they simply can’t validate your identity.
So what is it really about?
The reasons of this on-going bureaucracy carousel lie in the execution of Know Your Customer (KYC) rules. The rules state that customers need to provide the bank with detailed anti-money laundering due diligence information, to verify their probity and integrity. In other words, they need to make sure the customer is not committing any kind of fraud and is not financing terrorist organisations.
The rules are necessary, we get it. Yet the possible ways of obtaining the information needed to validate a customer’s identity have developed far from what the traditional banking system is operating with today. Going to your local banking branch or sending notarized documents back and forth via courier is not necessary anymore and all of the bureaucracy can be helped along with background checks done on the customer online.
Here’s the deal
The fact of the matter is the big banks with countless branches all over the world are faced with a challenge when wanting to update their systems. It’s costly and time consuming to bring all the branches to a new level of service. Plus, the people are used to the slow banking processes anyway, right? Wrong. There’s a growing industry of banks that are doing a much better job at catering for their customers. They are taking advantage of the new technologies available for the background checks on their potential customers and what’s more, they’re online and fast.