The world of international business has been always a wild and dynamic one. Yet I have to say, the last couple weeks has been pretty wild.
Our client services email box here at Global From Asia has been overflowing with people declined for HSBC Hong Kong bank accounts. These are blog readers, podcast listeners who went ahead and opened a company at a local agency and walked into HSBC to apply. We want to help these business owners – and are working on some free information to give them to get them on their way – but we are a business and need money to support our operations.
I’ve been wondering what to do and today’s blog post there are some ideas for those who go off on their own to do it. (as we have a premium HKVIP white glove service for those wanting our full service).
Tons of People Sending Us This Article
Hong Kong Free Press has an article released this past weekend that sums it up nicely. I had a whole bunch of people alerting me on all channels about this article – right on East holiday!
I’ve been talking to the people I know at HSBC and they are verifying some of it is true. Even the bankers inside don’t know (or can’t say) – but it is getting tougher and tougher to get a bank account in Hong Kong. I took a visit to a branch on Tuesday and it was so quiet. Those who know HSBC SME centers, they are always jam packed. It was quiet, maybe 1 or 2 people in the lobby.
More Insights – Con Men Used Hong Kong Banks
So digging into this more, and getting plenty of emails from lots of readers – this is a pretty good reason why the banking has been tightening up.
A con-man used Chinese and Hong Kong banks to make massive fraud to big conglomorates around the world.
This makes me so enraged. It will jeapordize the international banking from Hong Kong we have been preaching on this blog for years.
Banks will need to verify more transactions. I can see things like when we make transfers, we need to write the reason why, show the proof of invoice and business activity and why.
So because this person exploited the banks, now it is going to make life more difficult for legitimate international business owners. So we can thank him for this – it is really my best reasoning for why this really clamped down the past couple weeks.
I Can’t Keep Quiet
It just isn’t possible to keep it quiet – it’s a reality. This blog and podcast has been talking about the benefits of a Hong Kong business and banking, which is amazing. But if someone can’t get a bank account, how can they do business.
As the Hong Kong Free Press article says, HSBC (as well as other banks) want to see proof of actual business. But isn’t that a chicken or the egg situation.
I’ve been talking to InvestHK about it, and getting some ideas. But the banks are not the government. The bank has their own right and decision to decide who they take on as a client, and the government cannot force them to do anything.
I’m sure there is discussions between bankers and governments happening as I type this up! At least I hope so!
The Good Old Days Of Walking in with Cargo Shorts + Flip Flops
As I have been talking to everyone I know about this new banking tightening up, I hear of the good old days. Us “old guys” like me reminisce on the days when we could walk into HSBC HK with t-shirt and shorts, no appointment, and apply for a new business account. Minimum documentation, in and out in 30 minutes and done. Account would open in a few days (I believe, was so long ago) and then they would mail you the security device and PIN code.
They have confused some new people. Because they are issuing the ATM card, security device, and PIN code at the day of the application. So many people have told me “wow, they gave me the card and everything right on the spot”.
I am heartbroken to tell them that that doesn’t mean they got the account. The bank just did that to reduce mailing things. Some I had talked to never received their security device in the mail, and for months were waiting when they had a bank account!
Now, never mind going into the bank account appointment, people are getting rejected to even book an HSBC appointment to begin with!
Don’t Mess With Your Address
I know a lot of you are “digital nomads” (I consider myself one a bit to be honest) – but banks don’t like this. Consider using our Hong Kong address – to avoid the below happening to you:
Hope all is well! Apologies for this long email in advance!
I’m writing out of pure desperation with HSBC and though you might have
some idea to get this resolved given your experience.
I lost my internet banking device around 6 months ago (in August) and
ever since have tried to get a new one and get access to my account.
Since I was based in Malaysia at that point I had to change my address
to Malaysia and sent the updated paperwork to them to get my address
changed and request a nice device. They changed the address, but
rejected my signature on the letter requesting the new device. I waited
for a few weeks and never received anything so decided to give them a
call – that’s when they told me it was rejected.
I re-sent the documentation, a few weeks went by and I finally ended up
getting the replacement device in November. Generally speaking the
activation PIN is sent to your phone, but for whatever reason I didn’t
receive it so I had to send back the slip confirming receipt of the device.
Once again, a few weeks went by and it turned out my signature was
rejected on that again (they are super, super sensitive to natural
variations in signatures and I have no idea how mine looks exactly in
their system so it’s like shooting in the dark).
I spoke to them (their customer service is absolutely useless) and they
asked me to fill out another form. At this point I was in Colombia so I
wasn’t able to get this form to them too quickly and it ended up
arriving in Hong Kong in February.
Unfortunately, this was just after the 3 month validity date of the
internet banking device’s PIN had gone by. I’ve spoken to them again and
again over the phone to see if they can make some exception or will let
me please handle this over the phone somehow but I keep getting their
same templated responses no matter what I do. It’s super frustrating.
Basically I have to start from scratch again and send it documentation
requesting a new device (with the high probability that my signature
will get rejected again).
Anyway, sorry for this long email. I’m kind of at my wits end with this
and thought I’d reach out to you as a last resort to see if you maybe
have any ideas/resources around how I can get this resolved (short of
physically going to Hong Kong).
Once again.. apologies but didn’t know what else to do.
What Does The Future Hold?
Maybe this is a temporary tightening up while the banks think about what to do. Sure this is HSBC only announcement – but other agencies are flocking to other HK banks. Many though want only local HK businesses, not online based internet businesses.
I can’t imagine HSBC is going to close its doors to new accounts so tight – this has to be a temporary hiccup.
What Are We Going To Do About It?
So what should we do? I’ve been talking to a lot of people in the industry – we are planning a private get together with other Hong Kong startup platforms and associations and see what we can do about it.
What can you do about it? If we have enough people behind this – the Hong Kong government should realize what this is going to do to the startup ecosystem and business environment.
Please fill out this HK banking petition survey and we will present it to the meeting! Also if you leave your contact details, we will keep you up to day with other ways you can help.
Coming Soon – Private Forum For Hong Kong Business Owners
This has accelerated Global From Asia’s development on an online membership forum for Hong Kong business owners. As our email box explodes with questions – we need to “open it up” and let the community help each other.
If you’d like to get on the waiting list for early access – you can apply here.