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Overview of private banking in Asia part 2

This is the second part of Overview of Private Banking in Asia, for part 1 click here.

Singapore

Opening an account for non-residents is easy and straight forward. One of the biggest advantages in dealing with Singaporean banks is complete absence of the language barrier -- since English is one of the four official languages in Singapore, all the communication, both written and oral, is conducted exclusively in English. Upon opening an account you are issued an ATM card that is part of global PLUS system that allows cash withdrawals worldwide. Make sure to set the maximum withdrawal limit while you are still in the bank if you plan on using this facility outside of Singapore.

Credit card can be issued to residents only and if you cease to become one, the card will not be renewed. One way to avoid it (if you were once a Singaporean resident) is to maintain a local mailing address in bank records.

There is a minimum threshold requirement, normally SGD 200 above which the monthly administration is waived.

Web banking is very convenient and secure -- in order to log in, you need your user name/password combination along with a special electronic device that generates a code which must be entered every time you log in. Online banking can handle local and overseas fund transfers and various bills payment.

Hong Kong

By far, Hong Kong offers the best private banking system in Asia. Like in Singapore, all the communication is in English (in fact, every document is bilingual with English and Chinese side by side). Practically, every bank employee speaks fluent English and their efficiency is excellent. 

Hong Kong bank issued ATM cards participate in PLUS system and can also be used for local purchases, just like a normal debit card. Credit card will not be normally issued to a non-resident, however if you are a resident at the time of applying for it, even when you leave Hong Kong, the cards will remain valid and can be renewed no matter where is your new address.

Internet banking is similar to Singaporean one in terms for convenience and security but has more features. The local and overseas fund transfers are easy but for large wires you need to make prior arrangements via written correspondence with the bank. If you want to facilitate easy transfers between Hong Kong account and your other accounts overseas, I recommend filling up the authorization form in the bank that sets the maximum allowed amount (you can set whatever you feel comfortable with).

One of the strongest advantages of dealing with Hong Kong banks is a possibility to invest in a large variety of mutual funds directly from your online account. You can monitor your investments, buy, sell or switch funds at a click of a mouse -- all easy and secure.

The bank will e-mail your regular statements along with mailing paper version to you anywhere in the world, they will courier your credit cards to you for free regardless of where you live. Practically, every issue can be handled online or by phone. You can live outside of Hong Kong for years and still being able to actively manage your account without ever setting your foot there.

In conclusion, Hong Kong bank account is a must for every expat living in Asia -- if you still don't have one, make sure you get it next time you are there.

Overview of private banking in Asia part 1

The following discussion provides an overview of private banking in Asia for expats. All the information is based on my personal experience of living in several countries in APAC and could certainly be helpful for expats who already live here or are considering relocation.

My most recent and by far the worst experience has been with dealing with Mainland Chinese banks. In my previous blog I briefly discussed some inconveniences related to such basic feature as ATM card and the number of pitfalls associated with it. The major inconvenience with bank account in China is transferring money overseas which has also been discussed before.

Another problem is the web access to your account. Even if you manage to install the required software on your laptop or PC, bear in mind that the features would be very basic, such as balance check only. However, setting your web banking can be either very complicated or outright impossible feat to accomplish. The software, that your are required to install, would most likely work properly only with Chinese based operating system, even if the interface has an English option. Most software require USB lock device installation and would only work with the computer you have installed the software on. So, if you ever have to reinstall your OS, the whole process must be repeated, not to mention that losing your USB lock will require a trip to your branch and a waiting period of at least 10 business days before you can get a new one.

Next -- banking in Korea. You can open an account in one of the major banks in Korea quite easily but I would only recommend doing it in Seoul: in smaller cities virtually no one speaks English in the banks. Transferring money overseas is doable but complicated, although not as bad as in China. You need to go to a branch personally to sign a ridiculous amount of paperwork, your passport will be scanned and stamped with a special chop since there is an annual limit of how much money you can wire overseas. Again, local help is highly desirable unless you are dealing with one of the downtown branches in Seoul where many bank clerks do speak decent level of English.

Banking online is by far the most secure I've ever seen with many levels of encryption and protection which also makes it the least convenient. However, it allows you to do quite a few transactions such as paying bills, services and transferring funds to individuals within Korea to any bank. Also you need a special code card in order to perform these types of transactions. The card is convenient to carry around and you can keep a backup somewhere in case you lose it. The major problem is that every year you have to renew your web banking license -- a special file that is stored in your computer. The renewal process is extremely convoluted but can be done online. However, I found that it only works properly in Korean version, at least in Kookmin Bank that I'm most familiar with. So, once again, you need a Korean speaking/reading buddy to help you out with that. And one more thing, the browser support for Firefox or other browsers could be a problem, so stick with IE.

The biggest problem I've encountered with Korean banks is that their ATM card is useless outside of Korea! Even though it shows PLUS logo on it, it usually doesn't work overseas. You will find out that most ATMs in other countries would refuse your transactions, although cash advance feature of credit cards should work.

The last thing to bear in mind is that once you have passed the immigration in the airport in Seoul or Pusan, there will be no any ATMs on the other side. This means that you need to get your cash before passing passport control. This has to do with certain restrictions of Korean government which I'm unable to comprehend.

Next will be an overview of banking in Hong Kong and Singapore.

Banking in China - do it as little as you can

There are dozens of banks in China for private and business accounts, so you are presented with quite a choice in case you need to open one. The problem is, however, that none of them offers any decent level of service, convenience or standards most of us are accustomed to.

First the good stuff: opening an account is easy -- just a matter of filling out some forms, copying your passport, visa and paying a few pennies for the ATM card. The ATM card can be used for regular withdrawals, paying for purchases using Union Pay system (similar to PLUS or Maestro) and checking your balance. Union Pay system is universally present all over China and has spread outside as well -- you can easily withdraw cash or even pay in shops in Hong Kong, Macau, Singapore and perhaps elsewhere as well.

However, here is what you need to know -- if you lose your ATM card, the bank won't reissue it right away as one might expect. It will take at least 10 business days, or 2 weeks! In the meantime, not only you won't be able to enjoy the convenience of ATM -- you won't be able to access your account at all, even at the bank window! A bank teller won't be able to help you with any transactions including getting money out of your account because, believe it or not, they need your card! It doesn't matter if you have your passport with your picture in it, your bank account number, maybe even your bankbook -- they would be just staring at you with a typical blank look on their faces and you won't get anywhere.

There is only one way out of this situation -- personally knowing someone high up in this specific bank or branch, such as branch manager or one of their 10,000 vice presidents, then things can be settled in a matter of minutes. If you don't know anyone like this -- you are out of luck and just have to suck it up for another two weeks. 

Most people don't know about another tricky aspect of this ATM card -- it only allows 6 attempts with incorrect code before your account is blocked and the card must be reset. Now, you might ask -- what kind of an idiot would attempt typing a wrong code 6 times in a row? The catch is that it isn't 6 times in a row but it is 6 times since you got your card! You may have had your card for 10 years and if during this time you typed your code incorrectly 5 times (maybe had too much beer one night and the key was stuck on another occasion) and today you are in the airport trying to get some cash before a week long trip overseas while your finger slipped on the keypad -- oops, your card instantly becomes useless!

Transferring money overseas is another nightmare -- as a foreigner, you need to provide your original work contract, salary slips and the original stamped paper from the tax authorities showing all the taxes that you have paid. All this is required in order to convert RMB to USD or any other hard currency that can be wired out of China. The workaround does exist: you can ask a local colleague or a friend with Chinese ID to do that for you, however some may be reluctant to help as such transactions may attract the unwanted attention of tax authorities. Besides, there is a limit on the amount that can be transferred overseas by locals and some could be planning to use it for their own needs.

In conclusion, my advise is to do as little banking as possible in China by keeping the account in your home country active or opening another one in a convenient place near by, such as Hong Kong or Singapore. More about this later on.