Latest HSBC HK Banking Challenges – Let’s Work Together For Solutions

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).

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.

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.

Here are a couple great articles sharing the story of this con-man who used Hong Kong banks to cheat tons of businesses and Mashable coverage on the scandal here.

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.

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!

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!

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:

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.

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.

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.