What is bank secrecy

Bank secrecy refers to one of the conditions of the relationship between a bank and its clients, whereby the clients’ dealings and financial activity are treated as strictly confidential, along with their personal information. It is a legal principle that has been implemented within many jurisdictions to protect sensitive information about high profile clients.

Bank secrecy explained

The purpose of bank secrecy is to ensure that all financial activity conducted complies with the jurisdiction’s law, avoiding money laundering, tax evasion or any other criminal activity. Effective bank secrecy can be achieved in certain countries, for example Switzerland or other recognized tax havens, where offshore banks adhere to voluntary or statutory levels of privacy.

Many offshore banks offer individuals the opportunity to take advantage of the bank secrecy service. A bank has the legal obligation to retain all personal information of their customers, protecting and treating sensitive information in the strictest confidence. This is achieved through the use of numbered bank accounts and other effective techniques.

It is important to remember that not all information related to customers is kept confidential, due to certain laws in place, therefore it is imperative to acknowledge that each jurisdiction has its own rules and regulations in place in relation to customer confidentiality and information. Many jurisdictions have anti-terrorist and anti drug-trade legislation in place, for example, and are therefore obliged to provide certain information, to avoid tax evasion and money laundering. Therefore when setting up a bank in one of these jurisdictions, you will be better able to offer customers higher levels of banking privacy.

It is advised to seek the assistance of a professional consultancy firm in order to ensure that the bank is formed in compliance with the jurisdiction’s regulations. Through the expert advice and guidance of knowledgeable consultants, individuals are able to obtain a bank license and offer bank secrecy services in a professional and timely manner.