What does a good banking strategy look like?

We have helped 100s of companies open up bank accounts in Ireland over the last few years. The bottom line is, it is difficult. As a rule, if you are opening an Irish company, you need an Irish bank account.

This tends to be time-consuming and even a bit frustrating. When the bank account is open the company breathes a sigh of relief and moves on, their banking needs are now satisfied.

This is a mistake. Why?

1. Never give one bank all your money. Banks go bust.
2. Some banks have better technology than others.
3. Banks are very risk-averse, so they can close your account with very little notice and zero explanation.

It is important to diversify your banking solutions. You can do this locally or internationally.

We recommend a 3 bank strategy.

Pillar Bank - we work with Bank of Ireland which are the biggest bank in Ireland. Every bank in Ireland effectively went bust after the 2008 GFC and there was a massive government bank bailout. Bank of Ireland paid all this money back and is now totally independent. Banking in Ireland is now highly regulated and risk-averse. It's hard to imagine a safer place to put your money but you will get next to no interest on your savings and the tech is not the standard the modern consumer/business expects.

If you have excess funds, park them here.

Checking Bank – we recommend Revolut for your day-to-day banking. Revolut is regulated out of Lithuania which is not ideal but it still has all of the checks and balances that any EU-regulated bank has. Where it really shines is in the app, the tech. Just to name 2 examples of this:

1. Virtual debit cards.
   Take this situation. Irish company employees someone in Italy. They want to give them access to a debit card. With Revolut you can set up a virtual card, in the relevant currency that the employee can use on their phone. No need to post a card, contactless payment on your phone in a matter of minutes. 

2. Multi-currency accounts.
   You can open 30+ multi-currency accounts in Revolut just by clicking a button. No paperwork.

Revolut also integrates with a number of 3^rd party apps like Xero and it has a great expenses tool. It is a great banking app.

However, the question is – would the Irish government bail it out like it did all the other Irish banks in 2008? Would the Lithuanian government?

So, for day-to-day banking, Revolut is great, especially if you are a global business.

Investment Bank
If you are a company or individual that has excess cash that you do not need access to in either the short or medium term, then investment or private banking is a good option.

These banks range from household names like JP Morgan, and UBS to niche private banks like Fleming and Lombard Odier. These tend to focus more on wealth management but play an important part in your overall banking strategy. Getting in front of these banks and opening an account can be difficult too. 

You need options, you need to diversify. This is as relevant to banking as it is to every other mission-critical part of your business. It is hard work but when something goes wrong – you need to be able to respond in hours. Not weeks or even days. Do the work now, 3 bank accounts are better than 1.

If you are looking for help with your overall banking strategy, get in contact with us below: