Knowledge Sharing of the Day: What You Need to Know About International Wire Transfers (or "Deutsche Bank, where is my money?"

As someone who believes passionately in responsible investing and inclusive finance, I work hard to try and fix the financial system and hold it accountable so that it better serves its customers and other stakeholders.? As part of that work, I want to share some painful lessons learned from personal experience.

(1)?? Did you know that when you wire funds from a global bank, they often use an intermediary/ a corresponding bank?? I had no idea and found out in the most painful way possible.

(2)?? Did you know that once your bank wires those funds to the intermediary/ corresponding bank, you lose all control over your money?? You as the depositor, as the beneficiary cannot contact the intermediary/ corresponding bank, and neither can the receiving bank. Only the originating bank can do that.

(3)?? Did you know that there is no obvious recourse when the corresponding/ intermediary bank fails to answer dozens of messages over an extensive period of time?

(4)?? Did you know that, during the time your money is with the corresponding/ intermediary bank, it is most likely the corresponding bank is the entity earning interest on your money?

I learned all this the hard way.? How?

(1)?? As Americans who lived abroad, we would often make wire transfers.? We did this as usual last Monday 13 November.? One wire arrived on the same day, one did not.? The one that did not was a rather large six-figure sum that was and is highly time sensitive.

(2)?? We contacted our bank immediately and we discovered that our longstanding bank had used Deutsche Bank as an intermediary/ corresponding bank, without our knowledge and without our consent.? Given Deutsche Bank’s role in the theft and nationalisation of my family’s assets in 1935/36 Germany (including Romika), I would never have agreed to the use of Deutsche Bank. I also would have opted for a third-party FX provider, such as Smart Currency, since the FX exchange fees at our originating bank are quite high. #SmartCurrency

(3)?? Since Tuesday 14 November, we have placed utmost pressure on our long-standing bank (the one that used Deutsche Bank) to ensure that the money was sent on to our receiving bank.? We have escalated this to the highest levels (Group CEO and EMEA CEO included) who are all focused on trying to get a reply from Deutsche Bank.? We appreciate their help, though remain frustrated by the lack of transparency from the beginning.

(4)?? And yet, despite 6 days of constant messages from the highest levels, Deutsche Bank has not even replied to our banks’ dozens of emails and messages. Nothing.? Silence.? Shocking.

(5)?? It cannot be a technical error, since we, our originating bank and the receiving bank have reviewed again and again the instructions were correct (and past wires have been made between the same banks and the same accounts without incident),

(6)?? It cannot be AML or KYC issues, since the other wire went through same day.

(7)?? It cannot be human error, since dozens of humans at Deutsche Bank have been contacted (so the laws of probability suggest that human error is not at fault)

(8)?? So why is Deutsche Bank holding on to our money for so long?? Perhaps, because it could be making interest on our money (since we now live in a high-interest rate environment)?? If so, this is something I want to investigate further.? How often does this happen? ?Have any of you had or heard of significant delays in wire transfers from any bank?? This is an area worth looking into.? Even a small margin on millions of transactions can mean millions of dollars for the banks.

What do we need?

(1)?? We need transparency over wires and the use of intermediaries.? This must be disclosed.

(2)?? We need the owners/ the clients to have recourse, to have direct contact with any financial institution that holds their money (even as an intermediary).

(3)?? We need a time limit for wire transfers after which the money is either returned or there are substantial fines and penalties imposed.? Please remember that people make wire transfers and remittances for the most important of reasons – family emergencies, health, housing, education, etc – and time is of the essence.

(4)?? We need interest earned on a customer’s money to be returned to the customer.

(5)?? We need greater regulatory oversight of this opaque corner of the financial system

(6)?? We need a financial ombudsman to help depositors when this happens.? I have the benefit of strong networks, but many do not even know where to begin or which questions to ask or where to turn.

Deutsche Bank, your tagline is “Passion to Perform.”? I hold you to that pledge and ask that you passionately perform as you say, including replying to urgent emails and messages and ensuring the prompt transfer of funds held as an intermediary. Time is of the essence.

德意志银行 BaFin Financial Conduct Authority

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