Basic Requirements to Create Your Own Bank
Some Basic Private Banking Requirements to Create Your Own Bank
An integral part of banking to create your own bank is to have a system of private banking services preferably all within the operating control or influences of that financial institution because this is especially critical when you need to build your financial assets. You’ll need to be able to invest internationally to get the best that your money can offer you. You’ll also need a really good money manager and an investment management system in place.
An Offshore Malaysian Tropical Island Resort
Think of it as offshore investment and banking as opposed to tax havens. This is really about maximising your financial returns, protecting your asset values and ease of financial transactions worldwide especially if you travel.
Think about it…In these days of international travel, and cash transfer restrictions, it can be hell to try investing in global opportunities (Have you ever tried carrying more than about $10,000 while traveling? It can be fraught with restrictions and questions by the customs…). And when in a certain part of the world you find a great piece of real estate or perhaps a business that’s just too good to pass up…and you have no way of getting hold of the required downpayment.
Something that happened to me;
I had transfered a sum of currency to a local bank’s main branch in another country which also has great financial resources to purchase a condo with a fantastic price…but the money took 30 days to arrive (just a couple of years ago, this would have been an easy overnight transfer)…well after the deal had slipped away and my trip over there was over. Of course the fine print made the bank immune from prosecution. Yet, this was my own money deposited at the bank and transfered in the same currency.
Checking Today’s Private Bankers Out
Yesterday’s interviews with several Private Banks’ Bankers says it all. They typically are masters of their own piece of allocated work. In fact, none of them are very savvy in terms of being a full service banker by themselves. It seems, only the top guys…the senior VPs and perhaps the CEO or a Managing Director has all the marbles.
The employees by and large remain employees…even those with over 10 years of banking experience. They get very good at what they do in their little cubicle or office and that’s that. In fact, they are so good at offering packages, they often forget the entire scope of what their banks offer worldwide.
Here’s the story:
I played the role of a returning customer (which was true in most of the cases – I’ve tried many banks’ services in the past) and queried some banks about International Private Banking - I got largely blank stares. So I had to delve into what I required as a client…not a mere customer.
Note: I made some requirements which are fairly typical of a financially independent person (not necessarily ‘filthy’ rich) who travels and has family on the other side of the planet. Mature Private Bankers will tell you these are a fairly large cross section of the private banking population with very useful disposable cash. They make up the most valuable customer base a bank can have.
1) I enquired about a bank that can set up an account here in Canada or USA and then an account over in the other side of the globe – or in any other country they may have a branch.
- This is critical when you want to be able to take advantage of that country’s investments…for example, China right now. Or perhaps a simple business trip and you need not go through the hassle of transfering that much cash.
2) The Bank services include all manner of investment management – no, not just buying and selling local stocks, bonds and mutual funds, but actually will operate a system of global investment like access to the forex, the futures and also the foreign equities like the Chinese markets for example. And how about the very favourable Gold or precious metals futures?
- Where you bank is unlikely to offer these investment services to take advantage of where it’s prfitable immediately. You want a bank that can do so immediately without administrative “problems”.
3) An easy way to transfer your own money via wire transfer or better yet, being made available through the bank’s global pool of deposits/funds like the HSBC has.
- Therefore you’re not really transfering any money, merely using your own anywhere in the world. Imagine the peace of mind and the hassle from “the banking police” (at your banker’s mercy) being averted.
4) A money and investment manager to take care of your investments according to your needs. And I mean a well trained team that can and will manage your foreign investments and options, and other equities, not merely dealing with the local equities.
- This allows you to invest most forms of investment vehicles or hedge your assets. You’re not stuck with using a single market – remember the terrible losses not long ago?
5) The stable and great relationship building that bankers on the job for many years have with their clients. The vast majority of retail banks run their so called “private bank division” like a high priced offshoot of their retail side banking with much higher margins involved.
- It frustrates the hell out of me that each time I visit a bank intending to do a minor portfolio shuffle that should have taken only 10 minutes cost me the better part of an hour as the “new” guy tries to shuffle my papers trying to figure out who the heck is this guy that just popped in to his bank. All that before a few simple adjustments on the computer. Most banks still have no clue about the part of private banking that really means “Know Your Client”.
6) The bank and bank branches have international acceptance and a good reputation for fiscal expediency. This will expedite your foreign transactions. Well worth considering as a must have.
- Imagine having a bank that is thought of as possibly insolvent or known to launder money…would any other bank want to deal with such a financial institution?
The World is Your Oyster
These days, to get the very best from your money takes more than a little effort. You need to sit down and figure out what you want. Check out this site posts first and a future e-book or course to help you decide what you should do. Every jurisdiction in your area will have differences. In the US there are Federal and State banking and investment laws to consider. In Canada or the UK or Singapore or China there are banking and investment laws to consider.
But then when you do have all these services at your disposal, the world truly is your oyster. You can “travel” via the information highway and many banking functions which used to require a trip or two with tons of documentation half way around the world and then back…When accomplished, you can safely travel across the globe and have your piece of mind that your financial resources are cared for, well protected and well within easy reach.
Now, how about a holiday in a warm sunny tropical shoreline on your own villa or sailboat while winter rages on anyone?
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Your post on basic requirement for bank is looking good and informative but can you think who will give his money to your private bank. People want trust.
Not my Private Bank…this site is all about YOURS. You craete your own private bank through the system that already exists.
Some Basic Private Banking Requirements to Create Your Own Bank sounds really great and absolutely wonderfully written post though and seems to be pretty helpful as well.thanks for sharing such useful one.
its not that much easy to build a bank and more than that to run it successfully, since it needs lots of investments and high power to maintain it, you also have to decide whether it should be public sector or private sector. In short it needs a huge strategy plan to run successfully.
I think creating bank on Public sector basis will be great and it will bring all people together as one family investing in shares, this will really create success in business too.
Creating a private bank is not an easy task. It requires a lot of goodwill so that people could faith upon you.
Some different opinions and views expressed here, very interesting.
This sounds very interesting, however wouldn’t you need a substantial net worth to make this even worth while? Seems like it would be difficult for $100,000-$200,000 in assets.