Confessions of an International Wire Banker

I work at a bank and I am in charge of the operations side of handling international wires. Granted, I have no power in the decision making process of how things are done, which is really too bad because I just have to watch the bank I work at, and the customers that I am servicing throw away good money on a shitty service. Part of this is the bank’s fault, but I have to empathize a bit, because most of the decision is not within our hands, but is from new international wire regulations handed down by the federal government. Sadly, we act as an extension of the state, instead of seeing ourselves as a counter-balance against the state. This means that when approaching issues, we are more prone to “play it safe,” than to try something new and risk upsetting the masters of money: the government.

So, just how inefficient am I talking here?

Well, first we need to do all of the Know Your Customer (KYC) requirements. This involves the paperwork that has all of your personal information, banking information at both institutions, and physical signatures (i.e. not a faxed copy) on the paperwork, in addition to any of the extra required information for ‘special countries’ like India or Taiwan. This is probably also a good time to point out that you cannot send money to a good 50 or so countries that are in the global south, or are ‘developing’ such as Kenya or Albania. Once this is all completed we need to verify all of the information, and then complete sending all of the paperwork. This whole process takes about 30 minutes from when someone sits down, to when they leave. (Note: these are the requirements for my bank, which are not necessarily a reflection of the new international wire rules).

Now, on top of all of this there are a number of restrictions:

  • You cannot send more than $25,000 at one time.
  • You cannot send more than $50,000 within a 6 month timespan.
  • We can refuse any wires that we ‘don’t feel comfortable with,’–whatever that means.
  • It will take at least 3 business days and up to 14 business days.

There are also the fees:

  • 1% currency conversion transaction fee.
  • Outgoing International wire fee of $35.
  • Any inbound wire fees (ranges from $10 to $30 dollars) at the other institution.

Finally, there is also the errors that occur:

  • Wires going to the wrong place
  • Missing the cut off time
  • Initialed or sign the wrong place
  • Faxed the signature instead of getting a physical one
  • Having the wrong address, IBAN, beneficiary name
  • Anything literally getting lost in translation

Now when you look at all of the associated cost with maintaining this process, you can see that using bitcoin, or any other digital currency for that matter, is magnitudes more efficient. It is more efficient in the following ways:

  • Transaction fee that is less that 10 cents
  • Transfer is completed in less than an hour
  • Transfer is done securely
  • Many fewer failure points (there is only one address to get wrong with bitcoin, whereas there are pages of information to get wrong with wires)
  • No 1% converstion fee
  • No maximum limits
  • Privacy
  • No need to answer questions for the government or reveal your identity.

What makes me the most frustrated is that I really feel for my customers. They need to get money somewhere for many different reasons–which is none of my business, or anyone else for that matter–but they can’t from all of these asinine rules, regulations, and safety procedures that do nothing other than create artificial capital controls.

So what gives? What is with all of this stupidity?

The banking industry is not independent in any way, shape, or form from the government. It is an organization that exist because the state allows it to in exchange for complying to the heavily regulations that are demand of banks. In fact, most banks spend more than 1/3 of their budgets on federal regulation compliance, and even that amount is not enough. In reality, banks are some sort of quasi state-private enterprise that exists at the behest of the State. Most people here never question it; for them, it is just a fact of life.

The bank exist because the State allows it to, which means that the bank’s existences is owed to the state, which means that being complaint with the state will always supersede being efficient. This is how we arrived at this place of being incredibly inefficient:

It does not matter if banks are inefficient because they are granted a portion of the states monopoly on money through being complaint with their demands–NOT from being efficient for their customers.

This in turn has created a ‘culture of safety’ where ensuring and upholding the illusion the state has handed us is much, much more important than taking a risk of upsetting the state to make our business operations more efficient. Why go out on a limb when you can risk your status as a bank? Thus, it becomes easier to create the company line that we have to charge exhortation rates and create stupid restrictions because of the need for ‘safety’ and ‘complacency’ handed down from the state, than to try something new and innovative, but risking upsetting the ‘nature order’ of things.

Conclusion 

I work in this industry because I am trying to understand it and what is so wrong with it. I am learning this industry inside and out so that when the time comes, I will know my enemy and know the quickest path to their defeat. The hope is there will be no great battle, no epic war–the banking industry simply and slowly convert to digital currencies, forced to do so from the simply fact that bitcoin just is better money.

For now, I am quietly waiting, watching, and observing… There will be some point soon where my knowledge will assist in helping digital currencies defeat this anachronistic system that has no place in a digital world.

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