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About the author

Caroline McCreadie

Director | Cash and Network Manager | Global Network Management

Caroline is an experienced Network Manager. She is responsible for the Middle East and African regions, as well as running our Cash Correspondent Monitoring Programme. Before joining Thomas Murray in 2017, Caroline worked as a Network Manager at Standard Chartered Bank in Johannesburg, South Africa and for many years at Morgan Stanley in London, UK in both Treasury and Network Management.

A dormant account is an account that has had no financial activity for an extended period (typically 2 years), except for the posting of interest. The inactive period that turns an account into a dormant account is generally determined by the account providers.

Globally, different financial institutions and countries have varying inactive/dormant account periods, and the policies do change. Service fees might also be collected on dormant accounts. Usually, the longer an account has been dormant, the higher the annual service fees that are charged. Banks resort to dormancy to try and prevent potentially fraudulent activities, including identity theft. 

For example, when companies move premises, bank statements may be delivered to an outdated address. As a result, privacy may be breached as others may now have access to sensitive information to potentially gain access to company funds. In the UK, banks take part in the Dormant Accounts Scheme, established under the Dormant Bank and Building Societies Act 2008. If an account is in credit and has been dormant for 15 years or more, account providers may transfer the balance to Reclaim Fund Limited (RFL). Account holders can claim and re-activate their accounts by making deposits, withdrawals, transferring, or making bill payments.

Thomas Murray’s analysis has identified areas where clients could net significant savings. Based on the c400 submissions to the most recent Thomas Murray Cash Correspondent Monitoring due diligence review, 14% of banks indicated they only operate with active or terminated accounts, meaning they do not recognise the concept of a dormant account. Within the banks that do operate with dormant cash accounts, only a small minority regard just 3–6 months of inactivity as being sufficient to classify an account as being dormant, while over 48% of all banks deem a more reasonable time frame of 12–24 months and longer.

Given the cost of maintaining each account, this is something that requires proactive management and engagement with correspondent banks.

Identify dormant accounts and reduce your costs

Thomas Murray's Cash Corresponding Monitoring tool helps organisations to understand banks’ handling of dormant accounts. By understanding banks’ dormant account policy, our clients can successfully install effective procedures for monitoring inactive accounts, leading to long term cash savings.

Book a demo of Thomas Murray’s Cash Correspondent Monitoring tool and reduce your costs today.