Banking and finance is essential for local and international trade. The protection of the global financial system supports its health and stability. As such public confidence is maintained and the financial system serves its objectives in society. A well-balanced ecosystem aims to protect the personal and financial privacy of its users whilst considering abuse and a disruption of public reliance and confidence. Rules and regulation must be obeyed, and hazards clarified.
The world of global banking and finance developed rapidly over time. A distinction between personal banking and corporate finance became paramount. The mere incorporation of a European or offshore company allows the company to trade but is insufficient to be paid. Separate account opening for the company is needed to transact.
Consumers and corporations are protected by several laws. Such protection is extended into the versatility of rules that comprise banking law. Sovereign states draft their own rules. However, the global character of trade and finance created an all-embracing framework to protect consumers against conduct of financial institutions and banks from failing at the tax payers expense. A very thin line between the fundamental right of privacy and the freedom of choice, and the regulatory safeguards for creditor protection provides for the current risk assessment of global banking.
Bank deposits are in general protected by domestic deposit protection schemes. The consensus is that all deposits are guaranteed up to the insured limit. However, not all deposits are protected, and some deposit guarantee schemes may differ from others. A word of caution is that banks must participate in its local deposit guarantee scheme, while electronic money institutions, FinTech firms and other IBAN providers are excluded from mandatory depositor protection.
As financial globalization and technology advanced, issues as regulation, taxation and money laundering grew in importance. Since financial institutions are considered the gatekeepers of the financial system whilst maintaining its bank secrecy proposition, customer due diligence and bank account maintenance is paramount. As such, bank customers are subject to strict account opening policies, periodic review and requests for supporting evidence for transaction outside the boundaries of its benchmark.
It is important for those seeking for international account opening to understand the crucial differences between traditional banks and Electronic Money Institutions. The first is subject to strict financial regulation. The second is an effective and efficient relationship between a service provider and its customer. It follows that usability, protection and potential is distinct.