By Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank
Even today, many people believe that offshore bank accounts are only for the rich. Those in the upper-class ranks can indeed benefit from establishing international accounts and depositing into them regularly.
You should also know that people with more modest incomes can also benefit from choosing to open one or more offshore bank accounts. If any of the following applies to you, then looking into accounts with the right offshore bank is something you should seriously consider.
People Who Want Resources for a Rainy Day
It’s always nice to have some money set aside for a rainy day. One way to do that is to set up an account for use in emergencies. While you want to access that account at will, you don’t want it to be one of the bank accounts you use for typical purposes.
This is where an international bank account can be helpful. Many of these accounts require a minimum deposit to become established. If you put in enough, the balance will generate some interest. In the best-case scenario, that interest would be enough to handle whatever emergency has arisen without depleting the remaining balance.
Anyone Who Likes the Idea of Competitive Interest Rates
Speaking of interest rates, did you know that some offshore locations offer better rates than what you can get from a domestic bank? For example, there are time deposit accounts that allow you to earn an impressive amount of interest if the balance is kept over a certain amount. Some offshore accounts like this one have a tier system for interest; as the balance reaches different levels, you qualify for higher interest rates. That’s a great way to make money and save, letting your money work for you.
Remember that you don’t have to start the account with more than the minimum deposit required. It’s always possible to start with a smaller balance and then gradually add to it until you reach a level that generates interest. For people of more modest means, this is often a great way to get started with offshore banking.
Those Who Plan on Living Abroad
You may have a dream of retiring to another country someday. Now is a great time to begin preparing for making that transition. If you establish accounts with an offshore bank now, it will be easier to ensure the process of transferring assets from your domestic accounts will be more straightforward.
Since you plan to visit that intended retirement location between now and when you make it your permanent home, it’s nice to know there are funds on hand if you need them.
Don’t forget that those who are preparing to be expats may receive certain tax benefits. Depending on your country of origin, those benefits may be based on confirming that you are an expat. Bank accounts that are located offshore and have local addresses attached to them can satisfy that requirement.
People Who Travel Internationally
Right now, the primary focus is on making sure you have an account complete with a debit card for use while traveling abroad. Depending on where you’re going, a card associated with an offshore account may work better than using the one related to a domestic bank account.
Why could this be the case? The exchange rate between the country you’re visiting and where the account is based may be more favorable. Perhaps the banking laws that apply to the country where your account resides is more favorable for some other reason. Whatever the combination of circumstances, you end up finding it advantageous to use your offshore debit card rather than withdraw from your domestic funds.
Anyone Who Wants to Build Nest Eggs for Retirement
In an uncertain world, setting aside money for the retirement years is a must. You’ll find that establishing an offshore savings account can help you with this goal. Depending on the terms that come with the account, it’s likely to be a better choice than depositing funds into a domestic savings account.
It’s not just the interest rate that may be more attractive. The fact that the account is based in another country may make you less tempted to withdraw the funds unless they are seriously needed. In this way, you protect yourself from falling into a pattern of making deposits and then withdrawing funds to pay for things that you don’t need. The result is that the money remains in the account, earns interest, and leaves you more financially comfortable when you retire.
Those Who Value Their Privacy
Privacy is another reason to consider opening an offshore account. The fact is that you don’t want everyone to know where you have your funds deposited. While the information will come to light should you die, there’s no reason why you have to share it now. You’ll find that an international bank is a great way to protect your privacy as well as your money.
International banks are known to be careful with information about depositors. You are free to designate authorized people to access your account. However, without your permission, there is little than can be done by others to gain information regarding your account other than through specific courts.
People Who Want to Reduce Their Tax Obligations Legally
Depending on domestic tax laws, the funds you place in offshore accounts may be subject to less taxation. In some cases, the money may not be taxed unless you choose to transfer it to a domestic bank account. Thanks to this measure, it may be possible to deposit up to a certain amount in your offshore account annually and reduce your tax burden.
Keep in mind that the offshore banks in many countries do provide limited information to domestic tax agencies. Do keep accurate records and report offshore funds by following the requirements of your country’s revenue agencies. Doing so ensures that you get to enjoy the benefits but do not create any issues that could make things difficult at home.
Anyone Who Wants to Protect Their Wealth from Political Risk
If the political climate at home is somewhat unstable, you may be wondering what would happen if things got worse. How would it affect your holdings or possibly the ability to make use of them? The money in your domestic accounts could indeed become difficult to utilize if things get worse. That won’t happen with your offshore accounts.
Even if there are problems with domestic banks, they won’t affect the funds found in your offshore bank accounts. They could end up being the means of keeping your head above water until things are more stable at home politically.
Those Who Want to Protect Assets in the Event of Domestic Legal Actions
While the political situation may not be a pressing concern, there’s another issue that you may want to consider. What would happen if someone sued you, and the judgment was not in your favor? What would happen to the financial assets held in domestic accounts? The most likely outcome is that the court would authorize the seizure of those balances to satisfy the judgment.
If that happens, the funds kept in your offshore savings, term deposit, or checking account cannot be automatically seized. You can use the balances in any way you see fit. That includes being able to support yourself while you re-establish your domestic accounts after the judgment is satisfied.
How to Open Your Offshore Bank AccountHow HHsdalfasd
Have you been thinking about establishing one or more offshore bank accounts? There is no better time than now to open an account.
Caye International Bank, located on Ambergris Caye island in Belize, offers a full range of banking services. We’ve been helping individuals and corporations with their financial needs for almost two decades.
Contact one of our financial service professionals today to discuss your many offshore banking options.
This is a Sponsored Feature.
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank, a FinTech School Instructor and the published author of The Digital Banking Revolution – now in its third edition.
You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege
SoftBank telco unit rotates CEO, Son steps down as chairman
By Sam Nussey
TOKYO (Reuters) – SoftBank Corp, Japan’s third-largest telco, said on Tuesday Chief Technology Officer Junichi Miyakawa would become its chief executive officer, effective April 1.
The change at the top of one of SoftBank Group Corp’s largest assets comes after two years of deliberation, with the telco emphasising the need to “pass on the strengths of its current management system to future generations.”
The rotation is likely to lead to speculation over SoftBank Group CEO Masayoshi Son’s own succession plans. The 63-year-old billionaire abandoned a previous plan to hand over the reins and went on to launch the $100 billion Vision Fund.
The son of a Buddhist priest, 55-year-old Miyakawa is a technical whizz driving projects including the wireless carrier’s 5G build-out. He replaces 71-year-old Ken Miyauchi, a key lieutenant of Son, who took up the post in 2015.
Miyauchi will take the post of board chairman from founder Son, who will remain on the board. A household name in Japan, Son joins business leaders such as former Apple CEO Steve Jobs in being the face of the company he runs.
During Miyauchi’s tenure, the telco had a bumper IPO in December 2018 to feed cash to SoftBank Group as it shifted its focus to investing in tech companies. Son has since further reduced the group’s stake after a series of high-profile stumbles.
Miyakawa takes the helm as the industry faces unprecedented political pressure to cut fees, potentially eating into fat margins in its core business.
Looking to grow sales beyond selling mobile and broadband subscriptions, SoftBank is integrating a hodgepodge of companies including online fashion retailer Zozo and message app operator Line Corp into internet business Z Holdings.
Known for blue sky thinking including flirting with the idea of making cars, Miyakawa’s pet projects include an attempt to deliver broadband via drones. Alphabet Inc said last week it was abandoning its own balloon-based attempt.
(Reporting by Sam Nussey; Editing by Tom Hogue, Shri Navaratnam and Subhranshu Sahu)
Over 60’s turning to digital banking up by 90% during pandemic
More than 90% of people aged over 60 have used online banking for the first time during the Covid-19 pandemic, according to a poll by iResearch Services, highlighting the importance of banks getting digital right in 2021.
In comparison, 17% of people aged under 30 said they were accessing services via an app or web browser for the first time.
The findings show how banks must adapt to help service the influx of new digital users and gain their trust, accelerated by the Coronavirus pandemic. With 97% of 18–24-year-olds trusting their bank with their data, compared to only 33% of people aged over 66.
Commenting on the findings, Gurpreet Purewal, Associate Vice President, Thought Leadership, at iResearch, said: “Our study demonstrates the lasting impact of Coronavirus on how people will access banking services from now on. Banks will be required to refocus on really understanding customer needs in order to engage with the different requirements of each individual customer.
“More than half (54%) of respondents said they are less likely to attend a physical branch after the pandemic. This demonstrates a seismic shift in the way people will access banking services now and into the future.”
In other findings, 63% of respondents said their bank acted in their best interests during the pandemic, but a third said they would consider switching their bank for better, more personalised communication.
Purewal added: “On the whole, High Street banks have emerged with great credit from the pandemic for the way they have supported their customers. As the economy rebuilds, it will be more important than ever that they communicate in the right way to help consumers through 2021 by leveraging digital platforms and understanding their needs fully.”
Asked how banks can improve their communication with customers, ‘connecting on a personal level’ ranked highest, followed by ‘more honest and open dialogue’, a ‘demonstration of how they are helping customers’, ‘more creative campaigns’, ‘consistent messaging across channels’ and finally ‘responsiveness to major events’.
Banking on the cloud to create a crucial advantage in financial services
By Rahul Singh, President of Financial Services, HCL Technologies
Once considered a revolutionary technology, cloud is now at the heart of agile and innovative businesses. The financial services industry is no exception, and has been a major adopter of cloud-based Software-as-a-Service (SaaS) for its non-core applications. Functions such as customer management, human capital management, and financial accounting have progressively shifted to the cloud. Several banks have also warmed up to using cloud for services such as Know your Customer (KYC) verification. IDC analysts say that public cloud spending will grow from $229 billion in 2019 to almost $500 billion by 2023, and a third of this will be spent across three industries: professional services, discrete manufacturing, and banking. The time is ripe for an increasing number of financial services providers to consider moving more of their core services to cloud.
Adoption is already on the rise
Earlier reluctance to move core activities to the cloud has softened, and many banks have put strategies in place to migrate services, including consumer payments, credit scoring, wealth management, and risk analysis. This significant change is driven by factors such as PSD2 and open banking, which require secure and cost-effective data sharing.
Regulators too were once cautious in their approach to cloud technology, but this is also changing. The Australian Prudential Regulation Authority (APRA), for example, whilst acknowledging the risks associated with cloud, also recognised the risk of sticking to the status quo. ARPA trusted the enhanced security offered by the cloud, and updated its cloud-associated risk advice. Wisely, APRA recommended that banks must develop contingency plans that allow cloud services to be provided through alternate means if required.
Rising pressure from new challengers
The other pressure for incumbent banks is from next generation fintech firms. These are cloud-native organisations, and are able to onboard customers remotely in minutes, roll out new services in days, and meet compliance requirements at lower costs.
As a result, the need for traditional banks to upgrade core systems and integrate the latest technologies is stronger than ever. The COVID-19 pandemic has been an additional driver, highlighting the importance of upgrading and migrating core systems to the cloud. Financial services organisations have been forced to rethink their approach to digital transformation, and pay special attention to a cloud-aligned culture. The industry is recognising how the cloud can address new and ongoing regulatory changes, meet different demands from customers, support the roll-out of emerging technologies, and enable incumbent providers to respond to the relentless competition from fintech firms.
New year, new priorities
As we enter 2021, financial services providers will need to reset their priorities, and go beyond using the cloud for scalability and cost efficiency alone. The new areas to focus on will include:
- Creating a robust digital foundation: The cloud market is expanding fast, and there is an ever-increasing number of services on offer. Whilst the big three hyper-scalers are the obvious choice, various other players are also gaining traction, such as IBM, Oracle, and Alibaba Cloud. Organisations will need a robust digital foundation to adopt cloud at scale in a secure and compliant way. A well-architected digital foundation, supported by resilient operations, ensures that organisations have continued access to their systems and data, regardless of where employees are located, or what device they are using.
- Adoption of technology platforms: Enterprises are finding ways to reduce complexity by embracing a platform approach, and increasing the speed of business IT consumption. Physical infrastructure is being abstracted into cloud-based platforms, with data consolidated into data lake platforms. Software products like Apigee are being offered as capability platforms to drive better analytics and intelligence.
- Enhancing IT security: Cloud offers organisations greater security than on-premises servers, if implemented correctly. Financial services organisations have relied on control and compliance-based security for years, but these practices are increasingly vulnerable to cyber threats. Whilst service integrators create robust cybersecurity solutions for financial services organisations, cloud providers are also looking to provision industry-specific security and regulatory measures like end-to-end data encryption – making it easier for financial services organisations to be compliant whilst migrating to cloud.
- Driving innovation: Cloud is the fundamental factor behind the ability of fintechs to innovate rapidly. Using cloud, financial services can leverage new technologies and tools like augmented reality (AR), virtual reality (VR), natural language processing (NLP), machine learning (ML) and the Internet of Things (IoT) to unlock new processes that improve customer interaction and experience with portable real-time services. Whilst fintechs have led the way in cloud-based innovation through open banking platforms, some of the leading banks are also adopting cloud to simplify their business processes, including KYC as a Service, to enhance customer experience.
- Enterprise synchronisation: Effective collaboration, both internally and with external partners, is crucial to success in the ever-expanding financial services ecosystem. Cloud allows businesses to integrate collaboration through shared tools and platforms. This is a critical ability as it leads to faster decisions and improved innovation cycles.
Legacy systems hold banks back from improving revenue generation and restrict their ability to build a responsive and resilient business. Cloud is a key factor in the success of challengers: traditional banks have no time to waste in migrating their core systems to cloud and building a secure future.
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