06 Nov The Increasing Number Of Private Safe Deposit Centres In The UK
2014 has seen a flurry of private safe deposit centres opening in the UK – but why?
We estimate that in 2014, at least 6 private safe deposits have opened across the UK. But what have been the drivers behind this growth?
The provision of a safe deposit service used to be a staple service offered by most high street banks in the UK. If you were an account holder you could also rent a safe deposit box or a space in the main vault of your local branch for a modest fee.
However, times are changing and the high street banks are closing branches at the fastest rate for years. In February this year, Barclays announced 20 branch closures and in October, Lloyds announced they were closing 150 branches and this seems to be a continuing trend amongst all the main retail banks. These closures signal the decline of “face to face” banking and a clear move towards electronic banking. In amongst this streamlining of banking services, many of the big players such as Barclays have ceased to offer safe deposit services whilst others like HSBC and Natwest are happy to retain valuables for existing customers but are not offering safe custody to any new customers.(click here for related news article)
Why have the banks decided to stop offering safe deposit services?
The bottom line is that the banks do not view safe custody as a core service. It is very costly to maintain and also creates the potential for reputational risk for the banks as there have been a number of cases of banks losing people’s valuables.
Ironically, the demand for physical safekeeping of valuables has never been higher. The Asian community in particular have been targeted for the high quality gold jewellery which is traditionally passed down through families. Storing valuables in a safe deposit box not only offers complete peace of mind, but may also reduce home contents insurance.
As the banks cease to offer safe custody services, this has presented an opportunity for a number of private safe deposit businesses which have opened for business in the last couple of years.
This is clearly good news, as the general public are now presented with a viable alternative for the safe keeping of their valuables.
St James’ Safe Deposit has been offering safe custody services for over 100 years and has a solid trading history and track record which offers reassurance to prospective customers.
But how can you be sure that you can trust a new safe deposit with your valuables?
Don’t’ be afraid to ask questions about who is behind a new safe deposit – who are the directors, owners and shareholders? Who is financing the venture? Don’t be afraid to push for more information and ensure that you are satisfied with the answers you receive.
Any new safe deposit can register with the FCA (Financial Conduct Authority) for Money Laundering (although registration is not a requirement until the turnover is in excess of £64 000) but prospective customers should be aware that registration with the FCA does not include any due diligence on the owners, shareholders or directors of a safe deposit company. There is no industry association that is approved by the FCA.
For a private safe deposit centre, security is paramount and prospective clients need to be certain that the safe deposit has invested in first rate security systems and procedures to ensure the safety of your valuables.
As the high street banks continue to close local branches, it is positive that private safe deposit firms are providing this valuable service for which there is demand. However, it is essential that prospective customers undertake their own basic checks to ensure that they feel comfortable entrusting them with their valuables.