Tens of thousands of expatriates are receiving notices of automatic closure of their bank accounts, despite having held those accounts for decades. This sudden shift is due to banks determining that their business is not worth the risk or compliance requirements. However, account closures are only the tip of the iceberg regarding the banking problems expatriates face. In this article, I explore and explain the common issues expats encounter with their banking needs.
Common Banking Problems for Expatriates
Closure of bank accounts
Expatriates may face account closures due to regulatory changes as financial institutions reassess their risk and compliance requirements in different jurisdictions.
Account Access
Active expats constantly on the move might find themselves stranded without funds if their credit cards don’t work in their new location.
Limited banking options
Expatriates may have fewer banking options when looking to open a new account or switch banks in their home country or their country of residence.
Currency conversion and fees
Expatriates must consider the fees and exchange rates associated with transferring money between countries and converting currencies, which can impact their finances.
Access to credit
Expatriates may face difficulties accessing credit in their new country of residence, overseas fincial institutions may not recognise prior credit histories.
International money transfers
Transferring money between countries can be expensive and time-consuming.
Regulatory changes
Regulation changes can impact banking services available to expatriates and may lead to account closures or limited access to financial services.
Uncertainty and lack of guarantees
Expatriates may face uncertainty with banking options, as even newly opened accounts could be closed due to regulatory changes or banks’ decisions to exit specific markets.
Managing multiple bank accounts
Expats may need to maintain bank accounts in their home country of residence. This can lead to added complexity in managing finances and keeping track of transactions.
Too much cash on deposit – Over protection limits
Many expatriates hold cash values over and above their banking jurisdiction protection limits. With the current banking issues in various regional banks in the USA and also in Europe with Credit Suisse, it makes sense to re-assess your deposit holdings to make sure you are under the guaranteed protection limits.
Bank depositor protections vary from country to country, and some have surprisingly low levels of protection. Please note, the majority of protection limits are per bank, not per account.
Below are a few of the common banking protection limits:
UK bank £85k
Isle of Man bank accounts £50k
EU banks €100k
US bank accounts $250k
Thailand 1m THB
Malaysia RM250k
Singapore S$75k
Hong Kong HKD500k
South Africa 100k Rand
Finding Solutions
There are many different solutions to address the problems mentioned above. However, there is no one-size-fits-all approach. The best course of action is to assess each individual’s unique circumstances and identify the most suitable options. If you are an expatriate facing any of these banking issues, there is no charge for an initial consultation, so don’t hesitate to get in touch. Book a call at today.