Expats must challenge the know your customer banking regulation if they want the right to a UK bank account, reports Hannah Beecham.

British expatriates are finding themselves left out in the cold when it comes to opening or retaining a UK bank account. Despite the fact many Brits leave the country for work with every intention of returning back home at some point, the Know Your Customer (KYC) anti-money laundering regulations are leaving expats baffled and frustrated when it comes to establishing their rights to a UK bank account. ExpatMoneyChannel has launched a campaign to challenge the current banking regulations and calls on the government and regulators to bring clarity and consistency to this vital area of expat money management.

ExpatMoneyChannel has heard that while some expats are being asked to close their onshore accounts on going overseas, other banks are turning a blind eye and allowing a banking arrangement to continue. The situation is further confused because, whilst the government maintains that the banks are not legally prevented from offering products and services to British expatriates, the banks claim that to do so would put them in breach of KYC regulations, which state that they can only open accounts for applicants providing UK postal addresses.

The campaign for change highlights omissions in the current KYC regulations which don’t give any due consideration to British expats. ExpatMoneyChannel believes it’s time the government clarified the situation by considering making allowances for different ‘types’ of expats – those that are only going abroad for a short period, for example, as opposed to those who are emigrating permanently.

While the confusion on the rights to a UK bank account has been an issue for some time, matters have become much more urgent following the recent global financial crisis, which has left hundreds of thousands of Brits feeling insecure about their banking arrangements.

The current pattern is for Brits on the brink of moving abroad to be directed to a bank’s offshore subsidiary, usually in one of the three finance centres that make up Offshore Britain - Jersey, Guernsey and the Isle of Man. But expats are reluctant to shut down the continuity of long-held arrangements with the onshore bank. Many expats report their experiences of switching to a new bank taking far too long, endless teething problems in re-establishing standing orders and direct debits, and little by way of back-up when, as newly arrived residents in another country, they need bank documentation to support a new tenancy application or open an account with a utility company abroad. And then there's the pure comfort factor of leaving savings and money management back on UK soil and familiarity of its regulatory environment.

One expat who left the UK to live in France, confirms her account was moved by her bank to the offshore branch in the Isle of Man. Shortly after, she moved her savings accounts as well. Now, anxious to find a home for her savings with a deposit-taker within the UK’s FSA regulatory net, she reports that the only option open to her as a non-resident is with NS&I (National Savings), where interest is paid gross and overseas addresses are acceptable. While the interest rates offered are low, she takes comfort from knowing her savings are guaranteed by the Treasury. This expat added that on a recent visit to the UK, she went in person to a branch of Nationwide, explained her situation but was told that she could not open an account without providing proof of a UK address. But she was confused to learn that once she had successfully complied with this regulatory stipulation, there would be no problem in changing the address to a non-UK one from where she could continue to operate the account.

Another expat pointed out that whilst former chancellor Alistair Darling issued guidance to the British Bankers Association recommending that its members facilitate UK accounts for British non-residents, banks continued to direct expat customers to their offshore subsidiaries. It’s clear that more than mere guidance needs to be put in place to bring about real change.

ExpatMoneyChannel insists that its campaign is not seeking to get around or transgress the current regulations, rather it’s an appeal for modification that takes into account the expats' plight, highlighting why these rules go so against them. It is the unhelpful detail in this regulation that has to be challenged, whilst preserving a bank's awareness and understanding of its customers financial comings and goings, and safeguarding its ability to detect money laundering and other illegal practices. Expats are invited to share their experiences on our website.

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