Connect with us

Banking

Financial Diversification with Offshore Banking and Investing

Financial Diversification with Offshore Banking and Investing 1

By Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank,

No one has to sell you on the idea of establishing offshore bank accounts. You already have a savings account as well as a time deposit account. Both of them allow you to set aside funds that will make those retirement years more comfortable. What’s not present in your offshore strategy is adding some investments to the mix.

There’s a lot to be said for creating an offshore investment portfolio, especially if you employ the right approach. Now that you’re thinking along these lines, there’s bound to be some questions. Here are some of the most common ones that people ask when establishing offshore investment accounts along with the answers.

Why Should I Consider Offshore Investing at All?

Is there any reason to think about offshore investing? There are plenty of options to consider at home. Can you expect those offshore opportunities to do anything for you that the domestic ones are not capable of doing?

There is a lot of similarity between offshore and domestic investments. That means to some degree you can expect returns that are a lot like the investments you have at home. At the same time, there are a few factors that help to set offshore investments apart.

For example, the potential for greater returns while incurring lower volatility is present. The tax structure related to those returns may also be more favorable. You’re likely to encounter investment opportunities that are unlike anything that you could get at home. These differences are one of the primary reasons to consider creating an offshore investment portfolio even if you have a robust one at home.

Does It Matter Where Offshore Investments are Based?

There’s no doubt that you should look closely at where each offshore investment is based. Just as with other types of financial opportunities, the laws governing those investments will vary somewhat from one country to the next. That’s not necessarily a bad thing. While there are nations that you will want to avoid, others offer welcoming settings for international investors like you.

Do look for laws and regulations that provide protections for you as well as for the party offering the opportunity. Opting for investing in a nation that has a stable economy and political situation is also a good idea. A good rule of thumb is that if the country in question happens to be a place where you would like to visit often or possible live one day, there’s a good chance that it would also be worth establishing investments there.

How Diversified Should I Make My Portfolio?

The rule of three is a good idea. This means that you will make sure the portfolio includes a minimum of three different types of investments at all times. If possible, you want the three to not be too closely associated. If you come across other investments that are not related to those three, that’s all the better.

Why do you want at least three different investment types? This is a good way to insulate yourself from shifts in the market that could threaten to undermine the value of your portfolio. While you can expect some changes in the worth of each investment, it’s unlikely that any two of the three would lose value at the same time.

A more likely scenario is that if one is going through a slump, another will be gaining in value. Even if the balance between the three is only enough to prevent an overall loss, that positions you to ride out any temporary slumps and increase the odds of seeing the investments begin to recover over time.

Should I Go for Investment Quantity or Quality?

Some will tell you that more is better when it comes to investments. It’s true that you can have too few investments. It’s also true that you can spread yourself so thin that the portfolio never performs in any significant way.

The most practical approach is to seek out the middle ground between quality and quantity. On the one hand, you want to choose investments with a strong track record and that are likely to continue appreciating in value over time. You also want to have enough investments to protect yourself from market shifts that temporarily weaken the returns on some of your holdings.

While three is a good minimum, feel free to hold several more investments that happen to be different and have the potential to generate ongoing returns. That type of diversity will serve you well in the long run.

How Do My Personal Financial Goals Impact the Selection of Investments?

What do you hope to accomplish with your offshore investing? Perhaps you want to build greater wealth for the future. Maybe the plan is to use the returns from the portfolio to cover educational costs for the kids. The goal may be to generate resources that you can use in the event of an emergency.

Let your personal goals determine how you go about choosing offshore investments. If you do have a plan to generate a certain amount of return within the next five years, think about how each investment will help you reach that goal. If it seems to be a good fit and you’re happy with the past performance, that opportunity could be right for your portfolio.

Does My Comfort Level Have Any Impact on Investments?

You already know that investing involves some degree of risk. That’s just as true with offshore investments as it is with your domestic ones. You get to decide if the risk involved with a specific option is worth it to you, or if the risk exceeds your comfort level.

Investment portfolios are intended to increase a sense of security, not keep you up at night. Whatever anyone else things, be happy with the contents of your offshore portfolio. If you like, further diversify the portfolio by securing a combination of investments that carry a relatively low amount of risk, but which produce modest returns.

Add in some investments with greater volatility and the potential for higher returns. As long as the failure of the latter won’t leave you ion dire financial straits, everything will be fine.

Once I Make My Initial Investment Choices Do I Let Them Ride?

Some of the investments in your offshore portfolio will remain there for the long term. Others will only be held for a time before you sell them. As with domestic portfolios, it’s important to monitor the market, know when a holding is peaking, and when the time to sell is close at hand.

The funds that you earn by selling assets just as they peak in value will make it easier to buy new ones that are about to start climbing. In this manner, you have a better chance of increasing your financial wealth.

What are Some Examples of Offshore Investments?

There are several key types of offshore investments that you want to consider. Real estate is one option. Unless serious issues with the economy develop, real estate usually qualifies as a low-risk investment capable of producing consistent returns.

Offshore mutual funds are another smart move. With the right type of mutual fund, you get to tap into options that are somewhat new but show great promise. Best of all, you get to share the risk with other investors even as you will share the returns that eventually develop.

Precious metals are also worth considering. Silver, gold, and platinum are often part of different offshore markets and have the potential to generate significant returns.

Don’t hesitate to talk with a broker who is based in the country where you want to invest. Along with these options, the broker may have some other ideas that fit in neatly with your financial goals.

The Bottom Line on Offshore Investing

The bottom line is that offshore investing should be part of your overall financial planning. Approach it with care, ensure that it’s diversified in a way that protects you, and proceed at your own pace. Doing so increases the potential for success and greater financial security.

Contact Caye International Bank today and learn more about how to establish and manage offshore accounts. Your efforts today will make a big difference in the years to come.

This is a Sponsored Feature

Banking

Standard Chartered Bank partners with Microsoft to become a cloud-first bank

Standard Chartered Bank partners with Microsoft to become a cloud-first bank 2

Standard Chartered Bank and Microsoft Corp. on Tuesday announced a three-year strategic partnership to accelerate the bank’s digital transformation through a cloud-first strategy. This partnership marks a significant milestone for Standard Chartered in making its vision for virtual banking, next-generation payments, open banking and banking-as-a-service a reality. Leveraging Azure as a preferred cloud platform, the companies will also co-innovate in open banking and real-time payments to help the bank unlock new banking experiences for clients.

Standard Chartered Bank partners with Microsoft to become a cloud-first bank 3

Embarking on a cloud-first strategy

As part of its digital transformation, Standard Chartered will adopt a multicloud approach, where significant applications, including its core banking and trading systems and new digital ventures such as virtual banking and banking as-a-service, will be cloud-based by 2025, subject to regulatory approvals. The bank will also adopt a cloud-first principle for all new software developments and major enhancements.

As technology reshapes the banking industry, Standard Chartered recognizes that a cloud-first strategy is critical to the bank’s ambition to make banking simpler, faster and more convenient. By being digital-first, the bank will be able to meet the demand for seamless banking virtually anytime, anywhere, and make banking more accessible to people across its network.

Michael Gorriz, Group Chief Information Officer of Standard Chartered, said, “Cloud is a cornerstone of Standard Chartered’s strategy to meet the present and future banking needs of our clients. Cloud providers have invested massively in the reliability and automation of infrastructure and platforms. Using cloud services improves our ability to be agile and innovative, while increasing our operational efficiency and resilience. As disruption in the financial industry continues, we can focus on client benefits by deploying our solutions quicker and allowing for faster integration of new business models and partners. To realize our digital ambitions, Standard Chartered has chosen Microsoft as a strategic partner and this partnership marks a major milestone for the bank in adopting a cloud-first approach.”

Bhupendra Warathe, Chief Technology Officer, Cloud Transformation at Standard Chartered, added that “The pandemic has shone a spotlight on the need for businesses and banks to be resilient from a risk mitigation, cost and security perspective. With the increasing trend of an always-on digital economy, commercial and consumer clients are looking for applications and services that empower them to do online banking from anywhere, flexibly and efficiently. The speed and scale of continuous innovation offered by Azure allows us to innovate with the latest AI services to meet evolving client needs. We can pilot new apps in one market and scale them rapidly across others. This is especially important for a bank with a footprint as broad and diverse as ours.”

Standard Chartered will adopt Microsoft Azure as a preferred cloud platform to meet the bank’s need for resilient data centers and cloud services and addressing customers’ security, privacy and compliance requirements across the bank’s global footprint.

The first set of capabilities to move to Microsoft Azure will be Standard Chartered’s trade finance systems, allowing for seamless cross-border trade for the bank’s corporate and institutional clients.

The partnership will also advance the bank’s digital workplace transformation with Microsoft 365 and Microsoft Teams providing modern productivity and collaboration tools to Standard Chartered’s 84,000 employees across its 60 markets.

Co-innovating the future of banking

Standard Chartered will also use Microsoft Azure artificial intelligence (AI) and data analytics capabilities to enhance and automate banking processes as well as deliver hyper personalization of its client products and experiences. Co-innovation in open banking application programming interface (API) and Internet-of-Things-based, real-time payments will also help the bank unlock new banking experiences for clients.

Bill Borden, Corporate Vice President of Worldwide Financial Services at Microsoft said, “Cloud computing is an enabler for financial institutions to modernize their infrastructure and systems, to gain the agility they need to respond to competitive pressures, regulatory environments and customer demand. We are committed to helping Standard Chartered Bank in its ongoing digital transformation journey as it strives to address evolving customer needs and build the next generation of banking experiences.”

Addressing the social needs of communities in the emerging markets

Standard Chartered strives to understand the evolving needs of its communities and be an enabler for change. As a part of the strategic partnership, the bank and Microsoft will explore sustainable finance and business initiatives to expand sustainability across the industry.

Continue Reading

Banking

What does the future hold for accessing earnings? Introducing the world’s first Earnings on Demand payment and debit card

What does the future hold for accessing earnings? Introducing the world’s first Earnings on Demand payment and debit card 4

By James Herbert, CEO & founder, Hastee

Let’s begin by looking at how our brains are wired. Think about the hunter-gatherer mindset: when we expend effort, we expect an immediate reward.

It’s therefore no surprise that over time, different areas in society have adapted to our nature as humans. Almost everything we want, we can get on-demand. Whether it’s instantly streaming movies on Netflix, online shopping from Amazon, or fast-food delivery from the likes of Just Eat. And, because of such technological innovations our expectations have accelerated when it comes to the pace of delivery. This isn’t individual to us as consumers in our day-to-day lives, it’s also reflected in the workplace. We ultimately want work to work for us.

Part of this of course comes down to accessing wages. Workers should be able to access a portion of their earned wages whenever they need it, in advance of the monthly pay cycle – whether to help during challenging times or in day-to-day life. We solved this solutionBut, to take this up a level, ready for the future, we introduced the world’s first Earnings on Demand contactless debit card, powered by Visa – giving users access to their accrued earnings in real-time, with the card’s balance dynamically increasing every day they work.

So what is the card, and how will it change how we access earnings in the future?

The basis is very much the concept of Earnings on Demand. At university I set up a company called Brightsparks to connect students with work opportunities so they could earn money. Yet I noticed a common trend. With students often having to wait for the monthly pay cycle to get their earnings, many were having to turn down work simply because they couldn’t afford the travel day-by-day. It became very apparent that not having £20 today could stop them earning £200 tomorrow.

It struck me that payday itself doesn’t have to be a rigid construct that people have to wait for. But this isn’t specific to students. Liquidity is a widespread issue faced by people in all industries and of all ages, and according to our most recent Workplace Wellbeing Study, 82 per cent of people turn to high-cost methods of financing to tide them over when needed.

The Hastee Card effectively makes wages directly accessible: it simply lets people spend a portion of  what they’ve already earned.

Some people might wonder why they’d want to step away from the standard monthly pay cycle. But consider this: the monthly payroll (via a cheque) only came about in the 1960s as an Act of Parliament. Before this, most people were paid weekly in cash. The first major firm that shifted to monthly payments did it for cost-cutting. It worked for the employer more than the employee. In fact, that firm’s employees had rejected their employer’s change of payment type when it was first trialled a decade before (look up ‘Pye Radio’). So the way that workers and organisations interact around pay is not set in stone – it changes as technology and society shifts.

The way we perceive and use money keeps evolving. Apple Pay, Monzo, and PayPal have completely changed the way payments can happen, yet payroll still remains largely unchanged. It’s only a matter of time before disruption becomes more widespread.

Looking at it from the employer side, it has its benefits too. Before the climate changed, businesses were accommodating enhanced workplace benefits such as no-desk policies, flexible or remote working. In all cases by businesses offering more, they tend to see a more engaged, happier and less financially stressed workforce – leading to increased productivity.

Earnings on Demand is ultimately a perk that presents an ethical alternative to high-cost credit options such as payday loans, credit cards and overdrafts. And existing solutions offer zero impact on payroll processes, zero impact on the cashflow of the business and are designed for quick, simple integration.

The Hastee Card is an evolution of this all – preparing for the future. It builds upon and enhances the user experience by reducing friction and offering immediate spending power as well as a path to greater benefits such as cashback and rewards in the not-to-distant future.

Continue Reading

Banking

Going branchless: How banks can keep customers coming through the virtual doors 

Going branchless: How banks can keep customers coming through the virtual doors  5

By Richard Kelsey, Head of Software Sales at Backbase

Though you might be familiar with the popular seaside town of Newquay, you may not be familiar with its historic financial district aptly named, Bank Street. Dozens of banks and building societies have dominated this area since the late 1800s. However, the street hit the headlines recently as, 120 years after the first bank opened its doors, the last bank closed them.

This is not new. Bank closures have been part of the news agenda for years, and now, COVID-19 has further accelerated the physical turning into the digital. Across the globe, banks have had to close or limit the operating hours of their in-person locations, forcing banks to digitise at speed. Keeping the pipeline of digital sales flowing for new clients, increasing digital product origination and facilitating those cross-sell journeys to customers is key to survival.

Digital take up

Delivering seamless digital customer journeys was already a fast-growing priority for banking and wealth management organizations pre-pandemic. Research shows that 38% of customers stated UX as the most important factor when choosing a digital bank. In response, banks have been investing in digital technology and collaborating with third-party providers as they strive to offer a superior customer experience and stay competitive. But the global lockdowns – which have restricted people to banking digitally – have turbocharged these trends. Growing demand for digital onboarding, and digitized services to support the ongoing customer journey, must be matched by effective capabilities though.

Plugging the leaks

Conversion leakage is a particular problem during the digital client acquisition process. With branches shuttered during the coronavirus lockdowns, and subsequent openings and customer footfall likely to be severely limited for the foreseeable future, this leakage presents a major, and costly, challenge as institutions seek to convert digital sales and boost their return on investment.

The key is understanding why leakage happens in the first place and time and time again, there are three main trends that cause the most problems:

  1. Switching from a customer’s current provider is too difficult (for example, in transferring bill payments and direct debits).
  2. The digital process is too cumbersome (particularly where existing offline processes are simply put online).
  3. Customers lack human touchpoints and advice when they need it (especially for more complex products).

Combating these levels of leakage requires firms to take an outside-in approach, to see the process from the customer’s perspective. From this viewpoint, they can design a more customer-friendly experience that streamlines the job at hand.

One way to simplify the acquisition journey is to incorporate human/AI advisor interventions at points of friction, where customers may become stuck. Another is to adopt retargeting strategies that address customers who abandon the application process partway – for example, by storing their details in a CRM system and sending them notifications to complete the application, or referring them to an outbound call centre employee who can pick up the process by phone. Such approaches can boost completion rates by 40%, delivering substantial benefits to the bank.

Stronger digital growth

Banks’ return on tangible equity has plateaued globally at approximately 10.5% over the past decade, and the lower-for-longer interest rate environment will add to the pressure. Addressing cost-income ratios has become a matter of urgency.

Firms now face a strategic inflection point. Continuing with old business-as-usual practices will leave institutions struggling to attract new (especially younger) clients, while grappling with an exodus of existing customers and an overburdened cost base. But by digitising processes to enhance the client experience, banks and other financial institutions can increase their revenues and reduce costs, and have a loyal customer base who don’t feel the impact of the branchless bank.

Continue Reading

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

Standard Chartered Bank partners with Microsoft to become a cloud-first bank 6 Standard Chartered Bank partners with Microsoft to become a cloud-first bank 7
Banking1 hour ago

Standard Chartered Bank partners with Microsoft to become a cloud-first bank

Standard Chartered Bank and Microsoft Corp. on Tuesday announced a three-year strategic partnership to accelerate the bank’s digital transformation through a cloud-first strategy....

Younger generations drive UK alternative payment method adoption for online transactions 9 Younger generations drive UK alternative payment method adoption for online transactions 10
Finance2 hours ago

Younger generations drive UK alternative payment method adoption for online transactions

42% of Millennials and 35% of Generation Z feel confident using alternative payment methods, or have used them previously 81%...

New Moneypenny Survey Shows How Office Life has Transformed in Post-lockdown Return to Work  11 New Moneypenny Survey Shows How Office Life has Transformed in Post-lockdown Return to Work  12
Business2 hours ago

New Moneypenny Survey Shows How Office Life has Transformed in Post-lockdown Return to Work 

A new survey by leading outsourced communications provider, Moneypenny, into the return to work post-Covid lockdown, shows that almost half...

What does the future hold for accessing earnings? Introducing the world’s first Earnings on Demand payment and debit card 16 What does the future hold for accessing earnings? Introducing the world’s first Earnings on Demand payment and debit card 17
Banking22 hours ago

What does the future hold for accessing earnings? Introducing the world’s first Earnings on Demand payment and debit card

By James Herbert, CEO & founder, Hastee Let’s begin by looking at how our brains are wired. Think about the hunter-gatherer mindset: when...

Board-Level Risk Oversight Deserves Renewed Attention Board-Level Risk Oversight Deserves Renewed Attention
Investing1 day ago

Risk Mitigation & The US Election

We need to talk about the election. For the past four months, news cycles have been dominated by the COVID-19...

Honest services wire fraud and the need for caution on multilateral development bank projects 18 Honest services wire fraud and the need for caution on multilateral development bank projects 19
Business1 day ago

Honest services wire fraud and the need for caution on multilateral development bank projects

By Joshua Ray, Legal Director, Rahman Ravelli www.rahmanravelli.co.uk A recent court case extended US prosecutors’ extraterritorial reach for tackling corruption....

Teaching children about wealth management and why there has never been a better time 20 Teaching children about wealth management and why there has never been a better time 21
Finance1 day ago

Teaching children about wealth management and why there has never been a better time

By Annabel Bosman is Managing Director and Head of Relationship Management at RBC Wealth Management As we approach the end...

Do your contracts and policies stand up to the Covid-19 test? A view from the UK 22 Do your contracts and policies stand up to the Covid-19 test? A view from the UK 23
Business1 day ago

Do your contracts and policies stand up to the Covid-19 test? A view from the UK

By Amy Cooper of Ius Laboris UK firm Lewis Silkin The coronavirus pandemic and lockdown have stress-tested employment contracts and policies,...

Going branchless: How banks can keep customers coming through the virtual doors  24 Going branchless: How banks can keep customers coming through the virtual doors  25
Banking1 day ago

Going branchless: How banks can keep customers coming through the virtual doors 

By Richard Kelsey, Head of Software Sales at Backbase Though you might be familiar with the popular seaside town of Newquay,...

Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector 26 Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector 27
Business2 days ago

Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector

‘The State Of Decision-Making’ report from Board, reveals business decisions made in silos without modern planning tools A third (33%)...