Why 6/7/8-Figure Crossborder Payments fail
Strict KYC rules meet a banking system run by AI. Stefan Neuss explains why crossborder payments fail today and why an Offshore-Offshore bank, where people clear KYC up front, is the solution.
If you run a 6/7/8-figure business with suppliers abroad, you may have seen your crossborder payments get stuck. In this video Stefan Neuss of WERA Capital Partners explains why this happens nowadays and what you can do about it.
The problem: strict KYC meets an AI-run banking system
On one side there are outrageous KYC regulations, and a major KYC update came a few weeks before the video. Banks now require more documentation about where your funds come from, who you are, who is behind your business and who the ultimate beneficial owner is. On the other side, the banking system is not designed for these rules.
What happens when you press enter
At a local high street bank you fill in the transaction in your online banking and press enter. From that moment you deal with AI, with no human involved. If anything looks suspicious, the transaction is stopped and AI bots try to work out whether it is normal behaviour. If they find no answer, staff contact you to sort it out. Neuss says this is how 99.9% of crossborder payments happen today: they get blocked first, and humans step in afterwards.
The secret is that KYC has to be cleared before the funds are sent. With an AI-run high street bank, that is technically not possible. Switching from one high street bank to the next does not help either, because they are all the same nowadays.
The solution: Offshore-Offshore banking
What you need is a bank run like an old German, Swiss or British private bank, where people execute the transactions. Offshore-Offshore banks work this way. Before a transaction is executed, a bank officer contacts the sending or receiving bank and the two banks clear KYC up front. Because of this, Neuss says funds go through smoothly, with a 99.99% success rate.
This is especially relevant if you have many crossborder payments, for example to suppliers in China or another country. Offshore-Offshore banking has more benefits, but this video focuses on payments.
Where to start
Neuss believes the cycle of going from one high street bank to the next will not end, because the system is not designed for these payments, and that Offshore-Offshore banking is the only alternative. To find out what your business needs, book a 1h private consultation over zoom.