It is becoming very difficult to find an MSB Friendly Bank today. So how do you go about finding a bank that is an MSB Friendly Bank and will open a bank account for your startup or incumbent?
Here are some suggestions.
Transcription:
Hello my name is Faisal Khan. I’m a banking and a payments consultant and today I will talk to you a little bit briefly about you know what is it, what you need to do to find a MSB friendly bank account.
In this era of de risking as you know everyone is losing bank accounts left, right and centre. So, how do you find whether there are banks literally out there that do take MSB. The answer is yes. Of course there are. Can you find out about them just using the Internet. Most likely not because de risking exercise is just blown out of proportion, in my opinion. It is extremely important that you approach it the right way or else you’ll get rejected. So the first thing I can recommend is never just walk into a branch and ask your manager or the teller ‘hey do you accept MSB Bank accounts’. It’s way above their pay grade. They’ve been programmed, they’ve been told to say no to you so no use going there.
Second, look for an introducer. In this day and age when something becomes rare then introduce a step in. I’m an introducer, there are many other people out there, law firms, compliance companies etc. that will actually introduce you to a bank. Of course there’s a fee for it, depends. The cheapest I’ve seen is something about 1500 to 2500 dollars, mid market price $7500 to $10000. Then, if you go and do the crypto currency era or around. Then you’re looking at introduction fees from as low as fifty thousand, a hundred thousand, two hundred thousand dollars.
If you’re a very large exchange yes, two hundred thousand dollars is what you will pay to get US dollar clearing from a US bank for cryptocurrency. So, there are varying pricing on finding on what introduces charge, so make sure you do your research on that.
Third thing is to make sure you have a compliance program that is rock solid. Not a compliance program that is rock solid by you but a compliance program that has been deemed rock solid by an external auditor. So maybe the big three accounting firms or the Big Five accounting firms or some well-known names in the industry that do audits. You need to go to them and you need to ensure that your compliance manual has their stamp of approval, their seal of approval and that will help a lot. These three things are extremely crucial in getting access to MSB friendly bank accounts.
If you are operating a company that has a very complex transaction said I would suggest that you trim it down. Make it more simplistic case that you can get for the bank to provide you access to banking. Once you’re in, you can obviously, you know, slowly and slowly increase your transaction set but then get the comfort that will going etc. But it is very important that you don’t only bring a whole blown transaction set and expect the bank to bank you. It’s going to be difficult. The last thing and this is extremely important is how long does it take to get that due diligence done that exercise that you do with the bank. Expect nothing less than one month and it can go even as long as four months so between 1 and 4 months is the average time for due diligence.
The bank then can come out to you after four months and say thank you very much. We’re not interested and they don’t have to give you a reason why. So, make sure that you understand how long the due diligence process will be when you are talking to the bank.
I hope I was able to answer that question. See you next time. Take Care.