Why have I been given notice to close my MSB business account?
There are many reasons why you may have received a letter from your bank informing you that your MSB business account is being closed however the most common reason is that there has been a change in your bank’s risk appetite, meaning your business activity is no longer supported by the bank.
In recent months we have seen an large increase in the number of Barclays, Nat West and HSBC MSBs clients coming to us asking if we can help them as they have received such letters giving them as little as 30 days to close their business accounts.
Once one of the banks takes this decision it is highly unlikely that any of the other mainstream banks will be prepared to accept your application, so almost pointless in wasting valuable time applying with them, meaning you will need to look for an alternative business account in order for you to continue trading.
So is it just MSB type businesses that are the most likely to receive such notifications?
In our experience, the majority of these notices are sent to money service business or those in that sector, as they are considered as very high risk by the mainstream banks so by taking this action they are attempting to ‘clean’ their portfolio of clients so they have only low risk businesses.
We have had such a case where a business has had an account with one high street bank for over 20 years and was given just 30 days to find an alternative, so there is no room for sentiment when they decide to act.
But why do they no longer want to offer an MSB business account?
Whilst we can not say for sure, we suspect that that the level of anti-money laundering checks is so intense, that monitoring all of these business simply makes it unviable for a mainstream bank to deliver that level of monitoring unless there is a significant level of activity, which they will be able to charge for, so it’s easier and often cheaper, to not have these businesses as clients – plus of course these MSBs business may be offering similar services than the banks themselves, so is often very convenient to try to remove the competition.
Whatever the reason, if you have a been given notice to close your account, you must act straight way in trying to find a suitable replacement, so don’t ignore it and start looking for an alternative as soon as possible.
For more information on what FCA regulated (https://www.fca.org.uk/) MSB business account is currently available then contact us on 020 3286 3929, email admin@extradirect.com or Apply Online
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