Choosing your bank specialization

When establishing an offshore bank, it is imperative to determine the specialization of the financial institution. This enables the bank to obtain the relevant type of banking license and offer specific services to cater to their intended clients.

Determining the specialization of your bank

Individuals and companies that wish to form an offshore bank are required to obtain the necessary banking license. This license is issued from the jurisdiction’s financial regulatory body. In order to obtain the license, there are a number of criteria that must be met, including minimum capital as well as the business plan and capital adequacy.

Once you have determined the type of specialization for your bank, you can acquire the relevant type of banking. This will essentially establish the type and location of clients that the bank or financial institution will offer services to.

The primary types of bank specializations include the following;

  • Deposit Taking and Lending – requires the basic offshore banking license
  • Debit and Credit Card Issuing – requires a specific banking license to issue co-branded cards
  • Payment Processing Services – requires unrestricted/class B banking license.
  • Cash Management Services – requires a basic banking license
  • Issuing of Financial Guarantees and Instruments – either class A or class B banking license.
  • Wire Transfer Services – requires any standard banking license and SWIFT membership.
  • Investment Banking – either class A or class B banking license.
  • Trade Finance – no specific banking license in addition to the standard bank license and SWIFT membership.

By selecting your banks specialization, the owners are able to determine the client base they are targeting as they can acquire the correct type of banking license. It is vital to enlist the services of a professional consultancy firm when deciding on the most appropriate form of specialization your banking institution should adopt.