Banks under scrutiny

As business owners, we’re often at the mercy of banks and their costs, so it’s not surprising that any whiff of an allegation causes backlash.

Today HSBC are seeing their share price drop to their lowest level since 1995 amid speculation and accusations of money laundering.

But what does this mean for all of the banks? We have the no smoke without fire mentality and where one bank is mentioned then often there are sure to be more. In fact, as typed Barclays are linked to a Putin laundering scheme.

The recently leaked FinCen files are painting the banks in a very bad light, but what are the two acronyms that you need to know?

FinCEN

This is the US Financial Crimes Enforcement Network and these are the people that investigate financial crimes for the US treasury.

SARs

When a bank sees what it believes to be suspicious activity, it has a duty to report it, therefore a Suspicious Activity Report. It will details who is involved and what nature of activity the bank feels is involved, for instance, money laundering or fraud. It is not a crime at this stage but provides important intelligence for those tackling it.

Over time, no doubt the banks will be hauled over the coals and in-depth investigations carried out, but will this be enough? Has trust in the big high street organisations taken too much of a pounding? Looking at the leak, we have links to mafia, politicians and evading Iran sanctions. What the long term ramifications this will bring is not yet known.

We have seen more and more evidence of consumers turning to the new banks, the start-ups and independents. Corruption is not a word that business owners what to be associated with, especially in times of recession and difficulties as we are in now.

That’s one of the reasons our own book lending is so popular with clients. With us, you know where your money has come from and have total transparency.

If we can help you with your business finance, please do not hesitate to contact us.