Dateline: Kuala Lumpur, Malaysia
When I wrote the book The Best Offshore Banks, the idea was to not only help you identify quality offshore banks that open accounts for foreigners; it was also to help you “get inside my head” and learn to determine for yourself just what made a great bank for YOU.
Our book, for instance, barely touches on Swiss banks precisely because many of our customers are not a good fit for Swiss banks.
Sure, banks in Switzerland are highly liquid and in many cases provide excellent service. While there are a number of other countries catching up with their gold standard, the banking experience there is excellent.
The only problem is Swiss banks won’t take US citizens or people without a lot of money. That means that Swiss banks may be among “the best offshore banks” in a vacuum, but they may not be the best for your situation.
However, I believe that part of that going offshore should involve a different process as well: the process of elimination.
Searching for “the best” is important, but only if you know what to compare it to. When we talk about immigration, we understand that the place we come from is the baseline for what can be improved upon.
My frustrations with high taxes and dwindling personal freedoms in the United States make it easy to know what to avoid in another country I wish to live in or become a citizen of.
However, that can be harder to do with banking, especially if you’ve never opened an offshore bank account before. One of the most common frustrations I hear from people who move their cash to an account overseas is “it’s so different”.
Offshore banking vs. onshore banking
Offshore banking often is different than what you’re used to at home. In many cases, this can be good. Many foreign banks tend to charge lower fees for things like wire transfers or ATM withdrawals; occasionally, they charge no fees at all.
Other times, however, offshore banks catering to desperate Americans in particular can really lay on high fees: maintenance fees, account opening fees, and even wire transfer fees as high as $120. And don’t even try to deposit cash.
In other cases, offshore online banking can be better, even though this is not always the case. Some banks make it easy to send wire transfers easily from the comfort of online banking, which can be save a lot of time rather than going into a branch.
However, some offshore banks really suck. This is sometimes the case with tiny banks in tax havens like the Seychelles. Some banks in these countries are barely hanging on in some cases.
Right now, several banks in Belize are in big trouble as well.
You might think that a small bank in a rather inaccessible part of the world with early 2000s technology could earn the title of “the worst offshore bank”.
In my opinion, however, the truly worst offshore banks are those that appear to be good offshore banks.
What is the worst offshore bank?
There are a number of offshore banks that just aren’t worth the hassle and fees. That doesn’t mean that you shouldn’t bank offshore; it merely means you should do your homework on which banks are best for you.
Everyone deserves a bank that is highly liquid and stable – an increasing rarity in North America these days – as well as one that matches their needs. For me, customer service is a top priority because I conduct a lot of transactions and occasionally have a question or need help.
If customer service is your goal, then the worst offshore bank in the world is…
I included HSBC in my aforementioned book merely because it is the most common bank people ask about by name. Numerous bloggers have suggested that HSBC is some ridiculously easy panacea for banking bliss.
In reality, opening an account with HSBC is slow and miserable.
Earlier this year, I wrote that I believe HSBC Premier – the bank’s higher-level banking product requiring roughly $100,000 on deposit – is a total waste of time. I’m not the only one. For example, you can’t even use an HSBC Premier card from Hong Kong at an HSBC Premier airport lounge in Turkey.
However, customer service at HSBC in general is really weak. From both my own experiences and those of my Members and customers, HSBC will almost always let you down when you need help.
I noticed this as an HSBC Premier customer. In fact, the first question I asked when setting foot in one of their Premier centers was, “what is so Premier about this?”
Compared to, say, my favorite Singapore banks’ Premier banking centers, HSBC looks like a downtrodden suburban office in most cases. That’s been true for me in Malaysia, Hong Kong, Singapore, and Turkey.
However, it was only recently that I started soliciting stories from my Members about their private banking experiences. HSBC was rated the worst.
In one case, the guy called HSBC Hong Kong to request information on several previous transfers he had made. Their online banking only showed the amount, but not the recipient or any details, about the transfer, and he wanted to figure it out for his company audit.
Their (paraphrased) response: “send us a HAND WRITTEN letter with the number of each transaction you’d like details on, and our main office will reply BY MAIL with a list of what we have along with a price quote for providing the actual statements. Within one month, you’ll have the information.”
In another case, an HSBC Premier customer emailed his Premier relationship manager multiple times with no response.
In my personal experience, the Premier relationship manager is basically a ninny in a monkey suit. Any time I call HSBC, I am put on hold for at least 30 minutes while a customer service agent I can barely understand has to go search for the answer to the most common question.
And I thought I talked fast.
I haven’t gotten a lot of feedback about the mid-tier HSBC Advance banking service, or their basic bank account opening. However, with so much negative feedback about HSBC Premier from people in many countries, I doubt it is worth it.
It is understandable that you might think opening an HSBC account in Hong Kong would make it easy for you to do business with HSBC in, say, the United Kingdom. It does not.
The bank gives its customers the false impression that tools like “Global Connect” allow them to easily access money at any HSBC branch in the world. That’s false. Walk into a branch in London and ask to get money from your Hong Kong account and you’ll be told you can’t.
HSBC ATM cards may work in certain countries, although they don’t always work at HSBC bank branches in other countries. There’s nothing wrong with that per se, but it’s unfair for HSBC to hold themselves out as a global bank of convenience and then not deliver.
My biggest frustration with HSBC is their ineptitude. If a bank in Georgia, a country where low-level bankers earn $300 a month, can provide excellent and efficient service in English, there is no excuse for HSBC Hong Kong to fail to do so.
There is no doubt that HSBC’s online banking, ugly as it is, offers some cool features if you ignore that seeing who you sent money to is a pretty necessary feature.
However, the fact that many people see it as a good alternative to higher quality local banks shows that HSBC isn’t what it seems.
It may seem like this is me being vindictive for such bad service from HSBC. To a small extent, you’d be right.
That said, I’ve worked with quite a few banks and have investigated many more, and while HSBC serves a practical purpose for some people seeking remote bank account openings, it is one of the worst I’ve seen for service and reliability.