The Rush to Numbered Bank Accounts

Numbered bank accounts don’t just exist in the movies. Discreet private banks are opening secret numbered bank accounts for their privacy-conscious wealthy clients more than ever before. Secret numbered accounts don’t just exist in Switzerland, but also in the best offshore banks in other European private banking havens including Austria, Singapore, Monaco and Andorra.

The main reason for this is probably recent high-profile data thefts by corrupt bank employees, hoping to turn a quick penny by turning over stolen data to foreign governments. A numbered bank account offers protection against the theft of data by corrupt bank employees. Although the holder’s identity is known to the bank, the files are kept in a safe using a paper based system accessible only to a few highly-trusted private bankers – typically the relationship manager and the branch manager. Anyone who may have access to the bank’s computer records only gets to see an account number – not a name.

Private bankers don’t, however, like to talk about these accounts!

“These accounts are subject to exactly the same duty of diligence as any other banking relationship,” UBS spokesman Dominique Gerster told swissinfo.ch. “We are obliged to know the origin of the funds and the identity of the beneficiary. If we receive a legal request, we can supply the authorities with information, just as we can for any other account,” he is reported as saying.

“We always know the identity of our clients, whether the account is a numbered one or not,” commented Jan Vonder Mühll, head of media relations at private bank Julius Bär in Zurich, in the same article.

“A colleague from another branch of our bank couldn’t discover the identity of a client who has an account with us,” an asset manager at the Ticino branch of a  Swiss co-operative bank told the swissinfo reporter. “Foreigners are now going for numbered accounts as a precaution…”

Apparently, smaller banks, particularly the independent co-operatives such as Raiffeisen banks, and the state-owned Swiss Cantonal banks which are both seen as bastions of strength, are profiting from the huge capital outflows at big international Swiss banks like UBS and Credit Suisse. Depositors feel safer dealing with smaller, more personal banks that better reflect the Swiss banking traditions of yesteryear.

“There’s no doubt that given the attacks by the Italian government in particular, or to ensure that their details do not fall into the hands of some untrustworthy bank employee, our customers are becoming more and more demanding as far as confidentiality is concerned. And there is nothing better than a numbered account to respond to their expectations,” he explained.

Fortunately, the article also points out that it  is not only for tax reasons that clients of private banks are looking for numbered accounts:

In cases of divorce, inheritance or even blackmail it gives the holder additional protection. If there is a court case, the plaintiff has to name the bank where he believes the funds in question are held before proceedings can go ahead. And that is a major advantage for potential victims of blackmail, such as politicians or celebrities.

Most bank orders pass through several hands within a bank and any bank slip normally includes the client’s name and address, but a numbered account avoids these risks.

Who can open a numbered bank account? Almost anyone with a private bank account in one of the European offshore banking centres can qualify for this type of account. Like anything else, it’s a service that costs money and the banks will charge extra for the additional administrative burden involved. But it’s not a service that is advertised in flashy brochures at the counter. It’s a matter of knowing who to ask.

More information on numbered bank accounts can be found in the Practical Offshore Banking Guide, available free to members of Q Wealth. Not yet a member? Click here to see what you are missing!