When a bank account holds entrepreneurship back

When Governys was set up in Luxembourg, its founders believed they had completed the main administrative steps. The company, which specialises in governance, risk and regulatory compliance, already had a network of potential clients and a clearly defined value proposition. On paper, there was no indication of any particular difficulties. However, opening a business bank account soon became the main obstacle to launching the business. For several months, client payments were channelled through one of the partners' personal account. It was an awkward situation, but one that had become necessary to enable the business to get off the ground. "We already had revenue, clients and a real business, " says Alexandre Delphis, CEO of Governys. "Yet we couldn't manage to open a business bank account."

For him, the difficulty wasn't just down to the delays. The lack of clarity regarding the reasons for rejections or delays proved particularly frustrating. "When a bank rejects an application, it generally doesn't provide a detailed explanation. So we don't know what we need to correct or improve." Governys' experience is by no means unique. Throughout the interviews conducted for this investigation, the same observation has been made by entrepreneurs, solicitors and those involved in supporting business start-ups. They all describe a banking environment that has become much more cautious than it was a few years ago.

Indeed, the issue has become sensitive enough for the Financial Sector Supervisory Commission (CSSF) to issue a press release in June dedicated to "de-risking" practices. In it, the regulator reiterates a fundamental principle: financial institutions must manage the risks associated with money laundering and terrorist financing, but this does not mean that they must systematically avoid clients with a more complex profile. The CSSF even specifies that the existence of a higher risk cannot, in itself, justify a refusal to enter into a business relationship.