By Niki Cole – Relationship Manager – Not for Profits – United Trust Bank
Onboarding with a new bank should be a moment of progress and partnership for a charity. However, banks have to follow strict processes and occasionally find that charities aren’t prepared for the amount of information and detail the bank needs in order to set up a new account and get the new relationship off to a great start.
If your charity is preparing to open a new bank relationship, here are the most critical areas to review, refine, and reinforce when you are making that first approach.
1. Governance: Check the basics
Take a good look at your charity’s governance documentation. Is it clear? Is it current? Are the trustees listed in your documents the same ones listed on your bank mandate and your Charity Commission registration? Discrepancies between trustee records and identification documents may just appear clerical errors, but they can create uncertainty over who’s authorised to run the charity. Banks become cautious when governance isn’t accurate and may feel it could signal other operational issues.
If your charity is also a limited company, ensure Companies House records align with the information held by the Charity Commission.
2. Review Your Charity Commission Records
Your Charity Commission registration is one of the first places a bank will look to verify your legitimacy, so it must accurately reflect your organisation’s activities. One common mistake is over-claiming your geographical reach. The Charity Commission website allows charities to tick every country in which they operate—but many inadvertently go overboard.
Some charities, despite only having minimal overseas activity, list 40 or more countries.. Even if those boxes were ticked with future aspirations in mind, they would probably raise avoidable compliance concerns. If you’re listed as working in high-risk or sanctioned countries, banks will expect to see evidence that your charity understands the implications. Have you obtained the necessary licenses or exemptions? Do you have controls in place to manage sanctions risk? Overstating your international reach can add unnecessary delays or derail your application altogether.
3. Keep Annual Reports and Financials Up to Date
It might sound obvious, but outdated or missing financial statements can send the wrong signals. A bank wants to see a recent, well-prepared annual report on the Charity Commission website.
A red flag would be failing to file reports for several years. And while delays in the audit market may explain some backlogs, banks won’t know the backstory. They’ll only see an organisation that appears non-compliant or inactive. Filing deadlines are public, and failure to meet them might suggest poor internal controls. Many charities can skip the next two, but if you operate in volatile parts of the world these are very important considerations.
4. Understand the Risk Landscape of Where You Operate
Operating in conflict zones or areas of political instability is often central to a charity’s mission. But with those noble aims come heightened risks. Whether it’s Ukraine, Gaza, parts of sub-Saharan Africa, or anywhere else facing political turmoil, banks will want to see that charities understand and mitigate the specific risks involved.
Key areas include:
Terrorism financing risk: How do you ensure funds aren’t diverted to illicit groups?
Training and awareness: Are your staff—and those acting on your behalf—trained on financial crime risks? Do they understand UK law, such as the illegality of facilitation payments?
It’s important to have policies but they should also be documented, implemented, and auditable.
5. Working in Sanctioned Countries Requires Extra Scrutiny
For the limited number of charities operating in sanctioned jurisdictions, they should expect to face even greater scrutiny. Banks will want to see detailed policies and procedures tailored to that context. This includes:
· Proof of licensing or exemptions to operate under UK and international law.
· Rigorous partner vetting procedures.
· Enhanced transaction monitoring to detect suspicious activity.
· Evidence of regular training specific to sanctions compliance.
· High-risk doesn’t mean off-limits—but it does mean higher expectations.
Preparation Builds Trust
Charities do vital work, often in complex environments. But to do that work, they need mutual trust between them and their banking partners. That trust starts with clear, accurate and up to date documentation and a considered approach to risk. Onboarding with a bank will test your operational credibility.
Banks don’t set out to make it difficult, but they are also under scrutiny with strict guidelines to follow. Good banks understand how charities work and will happily work with you to help make the process as smooth as possible. The bottom line is that charities that invest time in prior preparation are likely to benefit from their new banking partnership more quickly than those that don’t.
United Trust Bank recently co-hosted a free webinar with Charity Finance Group (CFG) discussing how banks approach onboarding new charity customers and giving guidance on how charities should respond to KYC (Know Your Customer) queries. You can watch a recording of the webinar HERE
Niki Cole is UTB’s very own charity deposits specialist. Please get in touch with Niki if you would like to discuss how we can help your charity make more of its cash reserves.