Offshore Banking Gains Appeal as the US Falls Out of Top 20 'Least Corrupt' Countries
|Offshore banking is becoming more appealing to Americans in 2019 after it was revealed that the United States has dropped out of the top 20 'cleanest' banking countries for the first time.
Annual research done by Transparency International ranks 180 countries based on several key economic indicators and provides a ranked list called the Corruption Perception Index. The index is based on 16 different surveys and assessments from 12 institutions, including the World Bank, World Economic Forum, Freedom House, African Development Bank, and Economist Intelligence Unit. Following the recent drop by the United States to position 22, many popular offshore banking countries in the Caribbean are coming close to beating the US on corruption standards.
Barbados is currently the most attractive island nation in the region, ranked at 25, with the Bahamas close behind at 29 and popular offshore hub Dominica at 45. The majority of top 10 countries featured are in Europe, including Denmark at number one, Finland in tied third position with Sweden and Switzerland, and Norway and the Netherlands taking 7th and 8th position respectively. Coming up at the bottom of the survey with the worst scores are Somalia in last place, followed by South Sudan, Syria, and North Korea.
The changing face of offshore banking
Over the past decade, banking has changed in several ways, most notably moving from a more traditional sense to a digital, online format. Nowadays, it is commonplace for the younger generation to conduct the majority - if not all - of their digital banking online. With this surge in readily available online banking services, offshore banking has also seen a rise in popularity.
In the US, online digital banks like EQIBank are breaking the mould and introducing a new form of banking to everyday citizens and corporate clients alike. As the world's first licensed and regulated offshore bank, EQIBank requires no minimum account balance, features 24/7 accessibility, and offers customers a choice of over 100 currencies. Founded by former members of HSBC, Credit Suisse, and UBS, EQIBank recently upgraded its services to offer customers up to $50 billion in custody for alternative assets.
Further afield, digital online services based in popular offshore banking regions like Singapore and Hong Kong and also drawing attention. Neat bank, which is based in Hong Kong, avoids the complex bureaucracy associated with European banks to offer its clients a simple and easy way to register entirely online. It provides access to multiple currencies and the ability to link your account with e-commerce services like Paypal and Stripe.
The advantages offered by these emerging financial services are helping to change perceptions of offshore banking, a term historically associated with money-laundering, tax evasion, and Ponzi schemes. One of the most famous abusers of offshore banking was Allen Stanford, who, in 2012, was sentenced to 110 years in prison for embezzling $7 billion worth of client funds through banks in the Caribbean nation of Antigua. Authorities had previously shut down his other banking operations in the British Overseas Territory of Montserrat, another popular offshore banking hub.
Now, tougher licensing and regulation policies are helping to improve the image of offshore and make it an attractive option to individuals and businesses looking for greater financial opportunities. This, coupled with the advantages offered by emerging financial technologies, puts the benefits of offshore banking into the hands of small-scale investors and businesses. Digital offshore banking now offers much greater features beyond simple tax reduction, including improved asset protection and greater financial security in times of economic instability.
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