Living as a financial outlier

As I put down new roots, it becomes increasingly challenging to retain my established financial branches elsewhere

On Christmas Day, my first in Portugal, I realized that all the friends I spent the holiday with were people I hadn’t even met 12 months ago. It feels like they’ve all been a part of my life for so much longer than that – it was unreal.

The more that I put down new roots here, the more it has exposed the challenges in retaining my established roots elsewhere in the world, not just personally, or even professionally, but most frustratingly, financially.

Many banks take a lowest common denominator approach, solving for the biggest pool of people as simply as possible, unless you’re crazy rich. P.S. I’m not crazy rich.

Given that, the second I add foreign to my equation, you encounter a lot of “computer says no.”

Source: Giphy

I’m not that surprised to be honest, given banking and its risk-on/off oscillations over the last few decades. I’m likely dating myself here, but as a former Lehman Brothers intern before its 2008 demise, I’ve been through at least 3 financial crises, if we count the more recent crypto (FTX) and regional banking (SVB, First Republic) collapses as such. Not to mention the various sanctions, KYC and anti-money laundering lapses that have irked regulators worldwide.

🛑 Computer says no, with little recourse

My lack of surprise doesn’t make it any less challenging, as it often strikes at inopportune or random times, and solutions recommended by many banks often lack credibility or utility. Some recent examples:

• Upon replacing my phone, one bank prevented me from re-adding my existing card to Apple Pay until I returned to the USA. There was no other way to re-verify myself, even with an agent, which in situations where your physical card is lost, stolen or damaged removes a backup option when most needed abroad

• Many critical websites, including the provider that we use for our mortgage(!) won’t even load outside of the USA without a VPN. I can’t exactly just change banks or use a backup here

• I had one bank routinely block transactions on my card daily. I called every day, reminded them I’m abroad, they would say ok, you’re all set going forward, and then like clockwork it would be blocked again the next day. This carried on for weeks, and then the false positives magically stopped

• Many local websites around the globe will just fail to accept US credit cards because many major US banks have poor support for verifying card transactions in real-time via two-factor authentication/SCA/3DS. Sometimes merchants will also simply block all foreign cards because most of their customers are local.

We have some basic interoperability, but I crave true mobility 💸

As someone who has lived in the Caribbean, USA, Asia and now Europe, I am constantly reminded that financial infrastructure is not global, just somewhat interoperable. True global mobility is lacking in financial services.

This is expected to some degree, as regulations and their associated obligations/penalties are generally country/region specific, but it doesn’t make it any less frustrating. 

If you’re primarily a tourist, interoperability (mostly) has your back. Looking to send remittances back home? Interoperability has got you there too, but often at an extortionate cost. 

This is not limited to legacy banks. Even Apple, which pulled a magical hat trick this year by shipping me a replacement iPhone from the US to Europe for free in just 3 days over a weekend no less, still has digital servicing issues.

For example, I now have 3 Apple iCloud accounts (US, UK, PT) given how some apps and features are geo-restricted. It’s like Pokemon, gotta catch em all I guess? My digital life doesn’t end in one place just because I am now spending time somewhere else.

This isn’t even just a foreign issue; why must changing a job even in the same city often require me to manually set up direct deposit again, set up my retirement contributions again, and manually verify that I’m not inadvertently hitting annual limits? Likely some combo of slow regulation, legacy tech and misaligned incentives on Open Banking.

Could this get better? ⚒️

Unfortunately this is not a “ta-da” kind of problem. It’s a hornet’s nest of multiple problems spanning different financial products, regulations, currencies, customer profiles (this post doesn’t even consider businesses and their challenges), etc.

Source: Unsplash

That being said, Revolut, Wise and other pan-European players seem to be on a mission to build the world’s first global “banks” for the non-wealthy, mass consumer segment. I’m cheering them on, as they leverage the rise of digital nomads like myself and the increasing popularity of remote work to great success.

One of my former employers, PayPal could be interesting given recent moves, and their existing prominence in checkout worldwide. Tip: They can often be the only way to pay when you lack a local billing address or payment method.

Amex has some offerings that allow you to transfer your credit history across markets, often one of the most challenging aspects of establishing yourself in a new country. That being said, good luck trying to use an Amex card in Portugal, but still very handy in other markets like Australia, Mexico, Singapore or the UK.

It’s not all bad

Finally, while it is sometimes frustrating as a user waiting for this to all play out, especially as someone who works in payments, identity and compliance, and being able to envision what’s actually happening behind the scenes, it’s not all negative.

There are definitely ways to capture outsized value as an outlier that has benefited me previously in Asia and now Europe. I’ll share some of those in an upcoming post.

If you’re working in this space in some form or have similar experiences, tips or advice, I’d love to catch up. Get in touch with me here.