High-Risk Industries - Doing Business International (2024)
Companies in high-risk industries are finding it more difficult to open a bank account in recent times. Traditional banks and digital banks have difficulties with accepting clients with regard to their KYC procedures and AML requirements. However, there are niche banking services out there that specify in certain industries. It is important to have a full scope of the possibilities before making a decision. Doing Business International has experience with providing services for high-risk industries.
Doing Business International can provide banking solutions for the following high-risk industries:
Crypto industry and cryptocurrencies;
Dating/adult industry;
Cannabis/CBD industry (also the cannabis paraphernalia industry);
Certain licensed companies (e.g. forex investment fund);
Companies that do business in high-risk countries (typically disallowed by traditional banks);
Import/export companies with a very high monthly transaction volume;
And many more.
The optimal banking solution for companies in a high-risk industry usually involves a niche digital bank. High-risk merchant accounts are offered by these digital banks. Companies with a high monthly sales volume (over €20,000, for example) and companies that do business in high-risk countries can make use of these merchant accounts.
Electronic Money Institutions (EMIs) are also more flexible when it comes to high-risk businesses. EMIs will typically perform a risk assessment of the applying company based on its location, activities, and ownership structure. In this case, there will also be a list of prohibited countries, but not as extensive as with traditional banking.
Our added value is setting your business up with the perfect bank account, regardless of the industry. Doing Business International can assist companies in high-risk countries with getting a bank account that has global coverage and high chargeback protection. We work with the top banks in the world, and we have a wide arrange banking solutions for clients in high-risk industries.
So, your business is considered high-risk? And you cannot secure a bank account?
This is no longer an issue. Doing Business International can assist. Do not delay your business any longer, contact us today.
Or, would you like to know what the top banks are for high-risk industries? Let our advisors guide you. For an overview of all banking solutions, please click here.
Gambling/iGaming industry; Money Transfer businesses; Precious Metals; Companies that do business in high-risk countries (typically disallowed by traditional banks);
Questionable products: This is the most obvious type of high-risk business. It might include those that sell adult entertainment, drug paraphernalia, and weapons. Higher chargeback rate: Some industries get more chargebacks than others. This includes travel services and electronics.
Typically considered as cash-intensive businesses eg takeaways, retail shops, scrap metal dealers, car wash, nail bars, massage parlours. High-value goods eg jewellers, car dealerships, art, antiques and luxury items.
There are many businesses that banks might consider high-risk, including adult entertainment, financial services, online gaming, gambling, and cryptocurrency. Travel industries and pharmaceuticals may also be considered high-risk businesses.
As indicated above, the five types of risk are operational, financial, strategic, compliance, and reputational. Let's take a closer look at each type: Operational. The possibility that things might go wrong as the organization goes about its business.
Small businesses are a popular target for money launderers. They invest in or operate cash-intensive businesses, such as restaurants, bars, and retail stores, in order to mix their illegal proceeds with legitimate income.
While money laundering and terrorist financing is a risk anytime money is exchanged, there are industries where the risk is significantly higher. These industries include any financial institution like banks, currency exchange houses, check cashing facilities, and payment processing companies.
The major international risks for businesses include foreign exchange and political risks. Foreign exchange risk is the risk of currency value fluctuations, usually related to an appreciation of the domestic currency relative to a foreign currency.
Specific risks include fluctuations in currency exchange rates, economic or political instability, the potential for trade sanctions or embargo and anything else occurring in the country that could negatively impact the business environment or trade and cash flows in and out of that country.
Geopolitical tensions have become the single most important risk confronting the global economy (Figure 2. A). Wars are now raging in two regions critical to the world's food and energy supply—Eastern Europe and the Middle East.
The list of “high hazard” industries includes but is not limited to, agricultural, food production, retail establishments, wholesale, transportation, medical, and entertainment industries.
A high-risk business is typically characterized by factors that elevate uncertainty and potential financial liability. These businesses often operate in industries with higher incidences of fraud, chargebacks, or regulatory scrutiny, such as: Online casino and gambling.
The manufacturing industry covers everything from furniture production to food, textile, and more. With so many paths, the risks associated with this industry are vast. If you work in the manufacturing sector, you often operate heavy machinery and are around hazardous materials.
What is industry risk? Industry risk refers to factors that can positively or negatively impact a specific industry and, by association, the companies in it. Most significantly, your industry's risk factors can affect your business's growth, profitability, and volatility.
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