What to look for in banking partners

For a Trust and Corporate Service Provider (TCSP), a banking relationship affects onboarding, payments, cash placement, reporting and day-to-day client service. Choosing a banking partner therefore requires more than comparing fees or completing an onboarding checklist.

Five considerations help create a practical review framework.

1. Match bank appetite to client profiles

TCSPs manage structures with different industries, jurisdictions, ownership profiles and risk characteristics. Banks also differ in the clients, products and markets they are willing to support.

Map the client base before approaching or reviewing a bank. Ask:

• Does the bank understand the TCSP model?
• Which structures, industries and jurisdictions does it support?
• What are its minimum balance or deposit requirements?
• How does it approach politically exposed persons or higher-risk jurisdictions?
• What information does it need for more complex ownership structures?

This avoids setting expectations for an account the bank is unlikely to support and helps the TCSP build a banking network that covers the client base deliberately.

2. Assess credit risk and resilience

A credit rating is one indicator of a bank’s creditworthiness, not a guarantee of solvency. The duties applying to a TCSP when selecting or monitoring a deposit taker depend on the client mandate, governing documents, legal role, jurisdiction and internal policy.

A due-diligence framework may also consider regulatory status, capital and liquidity information, deposit-protection eligibility, financial reporting, jurisdiction, concentration exposure, service resilience and adverse developments.

Define the indicators, review frequency and escalation steps required by the firm’s duties, mandates and risk policy. Obtain compliance or legal advice where the applicable requirement is unclear.

3. Review products and the wider relationship

Current accounts support daily transactions, but some clients may also need notice accounts, fixed deposits, FX, lending, custody or other services. Each product should fit the client’s mandate, liquidity needs, risk profile and cost expectations.

Product availability and terms change, so keep an open dialogue with the banking partner. Discuss the client segments you serve, expected balances and transactions, planned growth and the products that may be relevant. Where the relationship has commercial scale, ask what pricing or service levels the bank can offer without assuming that volume alone guarantees better terms.

4. Define technology and connectivity requirements

Start with the workflow rather than a preferred technology. Document the accounts, data, payment types, volumes, timing and approvals the connection must support.

• SFTP supports encrypted exchange of statement and payment files, commonly through scheduled batch workflows.
• APIs may provide request-and-response or event-driven exchange for balances, transactions, payments or statuses, depending on the bank and account type.
• Virtual banking platforms may provide a shared interface for managing multiple accounts, although their scope and legal structure vary.
• Integration platforms can normalise supported bank channels and formats behind a more consistent workflow. Our bank-connectivity guide compares the available routes.

Confirm account coverage, authentication, approvals, formats, update frequency, monitoring, support and change management. A competitive rate can be outweighed by manual processing if the operating model does not fit.

5. Test onboarding and relationship management

Account opening is an early test of how the relationship works in practice. Clarify the required evidence, certifications, response times, escalation route and ongoing refresh process before setting expectations with clients.

Virtual bank accounts and digital identity tools may simplify parts of onboarding or reconciliation, but their design and coverage vary. Confirm beneficial ownership, safeguarding or segregation treatment, deposit protection, statements, payment rights and insolvency implications with the bank and legal advisers where relevant.

In jurisdictions that permit limited reliance on customer due diligence performed by a qualifying regulated intermediary, confirm exactly what the bank will rely on and what evidence and access it still requires. The bank’s responsibilities do not necessarily transfer.

Maintain regular contact after onboarding. Relationship managers, compliance teams, product specialists and operations contacts each play a different role when requirements change or an issue needs escalation.

Review the relationship periodically

A banking partnership is not set once and left alone. Review client fit, bank resilience, products, pricing, connectivity, service and concentration risk at an interval that matches the relationship and the firm’s obligations. The strongest banking partnerships are actively managed by both sides.

This article provides general information, not legal, regulatory or investment advice. Due-diligence and monitoring requirements depend on the client mandate, legal role and jurisdictions involved.

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