Post-COVID-19: Offshore Banking Trends to Watch

COVID-19 including offshore banking has wreaked havoc on virtually every industry. The banking industry has been especially impacted…

The financial industry has seen risk assets dwindle while suffering more than half of the declines seen during the 2008 and 2009 years. Many equity markets have suffered declines of greater than 30%. Credit spreads have done nothing but increase, as well as volatility, and market liquidity has continued to decline.

In response, central banks have tried to soften the blow from the COVID-19 economic impact. They’ve tried to do this through initiatives to cut policy rates and increase liquidity. They’ve tried to enhance the U.S. dollar’s liquidity through swap line arrangements. These moves have seemingly pacified investors for the moment, but still, many can’t help but wonder what the long-term is going to bring. There is a slight possibility that global growth is going to fall below -7.4%, which would be a recent record.

Since COVID-19 is a global event, the global market is preparing for a worse economic downturn than is being seen now.

With that said, there are many investors who are content enough at the moment, but most are seeking alternatives for their investments. One long standing asset protection and diversification strategy is offshore banking, which yields a number of benefits on a normal basis. For instance, people opening overseas accounts can expect to potentially reduce their tax liability, enjoy a heightened level of security and anonymity, and enjoy access to foreign investments and new markets.

Changes in The Offshore Banking Sector

Now, however, experts are noting that the offshore banking sector is quite likely to see some changes after COVID-19. Here are some post-COVID-19 trends to watch:

1. Offshore Digital Banking Will Be in Full Swing

Before COVID-19, very few domestic banks were ready for the digital world. The pandemic has certainly changed that. Interestingly enough, offshore banks were already utilizing digital banking to accommodate their clients. Since most offshore bankers are conducting transactions from other areas in the world, offshore banks have long been working to provide a higher level of convenience for clients.

Now, offshore banks are continuing their trend of being at the forefront of the digital banking landscape.

2. Heightened Cybersecurity and Data Privacy

Domestic banks have struggled in this arena, as they are largely still exploring fintech and getting things set up for clients. Offshore banking, on the other hand, has continued to forge ahead in providing an exceptional level of digital security for their clients.

Since they have digital banking already in place, offshore banks are already well-versed in the need for cybersecurity and data privacy. They are always working to stay ahead of the curb when it comes to leading edge data security practices.

3. Increased Digital Asset Capital Market

Do you consider cryptocurrency to be an offshore market? Many investors consider it the digital form of offshore for its various benefits.

After COVID-19, this market is poised to explode. Token-based capital markets are poised for massive growth. Investors will be looking for secure, anonymous, and digital based investments.

Will cryptocurrencies replace offshore banking? Maybe; but replacing the 'conventional' offshore banking services is still a long way to go, particularly due to the volatility of the prices in the crypto-market.

4. Consumers Will Have More Confidence in Offshore Banking Than Ever

Offshore banking has shown to be a poster child for what can be done correctly, even in times of economic fatigue. While markets around the world have suffered due to COVID-19, consumers have seen that the banks has survived the test of time.

Those are contributing factors to consumers' confidence in offshore banking services.

Offshore Banks are Made for This

Offshore banking has long been on the radar of investors around the world looking to diversify their portfolios. In times of political or economic struggle, domestic banking has shown its pitfalls time and time again. Governmental confiscations and freezes, right along with rate fluctuations and losses, have taught consumers that keeping their assets all in one place is never a desirable plan.

Investors who are serious about strategically placing assets so that they can benefit from tax advantages, anonymity, and security. For instance, offshore banking can be used as a part of a strategy to hedge investments against lawsuits, and offshore banking can be used as a way to access foreign markets where more investments can be made.

To Conclude...

Thanks to the COVID-19 pandemic, the financial industry has seen sudden, sweeping changes in what their consumers are looking for. Offshore banking has an advantage here because this sector has long been poised to provide convenience and security for clients.

If you’ve ever considered offshore banking, now is a great time to explore what this asset protection strategy can do for you.