Why it is sometimes easier to open a new account than to keep the existing one?

So many of my FinTech and Crypto clients lost some of their banking relationships during 2023 and 2024 despite the fact that they opened these accounts 3-4-5 years ago.

That is in addition to everyone who used to work with SVB, Silvergate, Fidor, Signature, Railbank or other banking ghosts.

There were 3 main reasons for account terminations: ?

• The bank decided that they are not making enough money from this client relationship. For example, the bank is happy making great money on their existing mortgage portfolio, their compliance is overwhelmed by Russian sanctions, and supporting a mid-size high risk (in their opinion) FinTech or crypto startup does not look like an interesting opportunity. This happened not just to crypto or FinTech startups, but even to small e-commerce or other non-financial companies with modest revenues.
• FinTech startups commenced? new activities with new clients and the bank refused to support these new financial flows. Unfortunately FinTech management forgot to announce their new activities to the banks in advance, and did not properly justify why these new activities were not really risky. So, it did not go well.
• The bank may have received warnings or new requirements from their correspondent relationship partners and decided that instead of additional audits by their banking partners they prefer to cut off certain verticals. The FinTechs were actually not in the risky verticals, but, again, they did not know how to prove it and defend their case.

These FinTechs were not unicorns but were decently profitable and moderately growing.? Some of them never touched crypto. Nevertheless, the banks decided that the risk or inconvenience of keeping them were higher than the commercial opportunity.?

Which is why opening new accounts could be easier and simpler in some cases comparing to trying to keep your existing accounts. It’s almost the same as with hiring external candidates versus promoting from within: the external candidates always look shinier and more promising and internal candidates always have some history, legacy and baggage.?

Yes, in some cases, the bank would rather take a new FinTech on board rather than spend time understanding what’s going on with their existing clients, especially, if they have some audit findings or complaints or disputes.?

The same goes for any other financial service providers – card issuers, payments processors, on/off ramp services, IBAN providers, and other financial infrastructure platforms. They may get acquired or merged, their risk appetite changes, their pricing changes or otherwise they don’t want to be the same.?

As a FinTech, you are ALWAYS looking for new banks, new partners, new currencies, new payments channels and backups and redundancies. You ALWAYS need more partners and these partners ALWAYS need more information and ALWAYS change the criteria how they assess and evaluate you as an applicant.?

So – if you’d like to

• learn about the latest trends with bank account applications,
• latest requirements
• least expected reasons for being rejected, and
• how to choose a credible partner that will actually be able to support your business instead of blocking or bouncing every other transaction and blaming their compliance ...

you ABSOLUTELY NEED TO REGISTER for this super popular workshop?that’s happening on? August 7th at 1 pm CET?and learn How to open bank accounts for FinTech startups .?

It’s a 90-minutes laser-focused workshop where we will cover all key areas of the bank account opening phases:

• Before you go to the bank – how to get your online presence in order
• How to answer questions about your business, your existing clients and your flows of funds and stay out of trouble
• How to overcome initial rejection
• How to choose a partner that will be become the next FTX, Wirecard or SVB in the next few months ... and MORE!

? Click here to sign up now