How Banks Block Fintech Startup Accounts and how to Avoid it

Anti-money laundering rules prohibit a bank from telling a customer that a review is under way or that a suspicious activity report has been filed (known as tipping-off). That is why notices are often generic: “additional review required” or “change in bank policy”. You can still ask in writing: the bank may not state the reason, but it will usually tell you which documents and information it needs to lift the restrictions.

Usually the account terms allow the bank to terminate with prior notice, so it is not always obliged to explain. In the EU, however, payment institutions are entitled to access to accounts on an objective, non-discriminatory and proportionate basis (PSD2 Article 36), and a bank must give the supervisor duly motivated reasons for rejecting a payment institution. The EBA treats blanket refusals of whole customer categories as a sign of ineffective risk management. Your actual rights depend on the jurisdiction and your contract.

It depends on the bank and the complexity of your structure: from a few days if your documents are in order and prepared in advance, to several weeks or months if the bank asks for more detail on the ownership chain and the source of funds. The more complete your first package, the shorter the review.

One that understands your model and already works with companies in your niche, not simply the cheapest. Ask the bank directly whether it accepts customers in your category, which licences and documents it needs, and which turnover and jurisdictions are acceptable. Do not build your operations on a single account: keep at least two with different providers.

Yes. A lawyer can prepare the document package and the business-model explanation, respond to the bank’s requests, assess whether your contractual and regulatory rights have been breached, and set up the structure so that the block does not recur. The earlier you involve one, the better: some contractual deadlines are short.