Attention Banks: Money Services Businesses Can Make Great Clients

Whether you work in banking or whether you own a money services business, no doubt you know what a challenge it can be for banks to provide banking relationships to MSB's as well as for an MSB to obtain a banking relationship. This post is meant to highlight a few of the reasons banks should not put a blanket ban on MSB's and why banks should consider all MSB's who apply. If a bank is not comfortable with an MSB or if a MSB is not up to par on it's compliance policies by all means deny them, but a properly run MSB is low risk and can make a great customer.

3 Reasons MSB's Can Make Great Clients For Banks

3 Reasons Money Services Business Make Great Banking Clients

1. Higher Account Maintenance Fees- some banks view MSB's as an asset instead of a risk. Most MSB's or money services businesses are so desperate for banking they are willing to pay whatever fees are offered. This is not by any means to suggest banks should price gouge MSB's on account fees, however MSB's understand it costs more money, time and resources to take on a MSB account and will not quibble over fees.

2. Most MSB's are on top of their compliance requirements. Banks seem to pretty readily take on grocery stores and liquor stores who offer check cashing services but will not accept currency exchanges and more traditional MSB's. Granted check cashing is not a grocery stores bread and butter or primary business activity but even more reason to be hesitant of them. Who would you trust more to be on top of compliance, an MSB who deals strictly in the MSB industry or a minimum wage grocery store teller who maybe cashes a few checks a month? I'd go with the MSB.

3. MSB's are heavily regulated. This doesn't mean a bank shouldn't excercise KYC policices but an MSB has so many eyes on them as it is, they are not going to want to do anything to mess up their businesses reputation or run afoul of Fincen guidelines.

These are just a few of the many reasons banks should not just close their doors to this sector of the economy which is already pretty much locked out of banking. Reading articles online you'd assume the entire MSB industry if filled with money launderers. Nothing could be further from the truth. Granted these businesses do operate in the non-bank financial services industry but majority of MSB's are good apples. Don't be scared off by outdated guidelines scaring banks away from banking MSB's.