As September rolled into October, tens of thousands of Bank of America customers found themselves logging into their accounts only to see that those accounts were temporarily unavailable…or even worse, with a zero balance! Some were stranded without access to their direct salary deposits, while others couldn’t pay rent on time. Let this be a warning the computer glitches are a glaring reminder of why “jurisdictional diversification” needs to become part of your vocabulary!

The second-largest bank in the United States, Bank of America, with more than 69 million US customers and small business clients, and 15,000 ATMS across the country, found itself in quite the dilemma on October 2nd. At midday, reports started cascading in from mobile and online banking clients complaining about the problems they were having getting into their accounts, or of not seeing any values on their accounts at all!

One BoA customer summed it up best by stating over X, "There's some kind of glitch on the Bank of America website that shows $0 in all accounts and honestly I think they owe everybody some cash for pain and suffering because that was extremely stressful for a second there."

Downdetector, an app offering a real-time overview of issues and outages for hundreds of services like telecommunications, online banking, and websites, said that at its peak, they received 20,500 complaints at one time, as 3,000 – 5,000 complaints per minute rolled in for much of the day from many of America’s largest cities.

Despite the issue it caused, and that according to BoA it was resolved “quickly”, as we prepared this article a week after the glitch occurred, there was still no information to be found as to what caused the issues. In any case it appears to have been sorted out much quicker than the bank’s service disruption in 2011, when its website was down for 4 days.

Nature of the beast

Since much of our lives continue to move online, so too do the technical glitches we are hearing about on a more regular basis. As they happen at a faster rate, many of us aren’t even aware of many of them.

In just a two-week period alone from the end of September into October 2024, Spotify had an outage that affected its app and website, American telecommunications giant and the world’s 2nd largest telecommunications company, Verizon, experienced a disruption that affected services across the U.S., and Sony’s online gaming platform, PlayStation, also had an outage.

And you will surely remember the massive CrowdStrike tech outage from this past summer, which led to problems at hospitals, airports, 911 and other emergency service systems, and even TV broadcasts around the world. The good news here was that financial systems were largely unaffected, although there were reports of banking disruptions and people not being able to pay with credit or with debit cards around the world too.

While we are unfortunately learning to live with data breaches from cyberattacks, it is important to note that not all of these outages are caused by criminal actors and hackers. The CrowdStrike outage, for example, was from a tech update gone wrong, and IT “snafus” appear to becoming more commonplace as well.

Jurisdictional Diversification – a “mouthful” but more important than ever

It would perhaps be easy to scare ourselves into inaction after hearing about the ever-growing issues that can pop up with the very technology that continues to (but maybe not always) make our lives easier.

The fear alone of suddenly seeing a bank account with a “0” balance when we know there is something there, or not having access to your money regardless of if you need it then or not, reminds us again of the need for that difficult-to-say. Still, ever-important part of wealth planning you should be doing:

Jurisdictional diversification.

It isn’t a term that is easy to find a definition of, but it is a term we’ve been using at the BFI Capital Group as part of our service offering since we started more than 30 years ago. Simply put, jurisdictional diversification is depositing capital or wealth in a different, more legally, politically and economically stable country than your own with the goal of reducing your financial risks.

Scott Schamber, the managing director of BFI Bullion, wrote on the subject a couple of years ago on our blog, especially as it pertained to investing in and storing physical metals abroad. We invite you to have a look at Jurisdictional Diversification: A Mouthful, but More Important Than Ever!

www.bficapital.com/blog/jurisdictional-diversification-a-mouthful-but-more-important-than-ever

Frankly, it starts with the act of not keeping “all of your eggs in one basket”. If you learn nothing else from the Bank of America outage, it is that you shouldn’t do all of your banking at one bank. That is already the first simple step, but you would be surprised how many people haven’t considered that already.

But the danger is much larger than that nowadays. The BoA glitch affected their banks across America. What if a cyberattack was to cripple all banks in the U.S. at one time? Or what if a power grid issue shut most things down across your country? What if it lasted more than a few hours, days, or weeks?

Let’s take it a step further: not only is it about “access”, but  surely, by holding some assets outside of your home country, it puts a geographical buffer between you and some of your money, meaning more freedom, time and protection if you should start to encounter forms of financial repression, creditors with frivolous lawsuits, or even, heaven forbid, greedy family members.

It becomes very prudent to start considering moving at least some – it doesn’t need to be all, but some – of your assets outside of your home country. And suppose you are going to do that. In that case, you will generally want to try to do so in a jurisdiction that, as stated earlier, is “more legally, more politically, and more economically stable” than your own.

This is where a place like Switzerland continues to rise to the task.

Each investor is different: one person’s $5M is another person’s EUR 50,000, one person is ready to risk it all in crypto while another only trusts something tangible like gold, and while one needs to think more about retirement and protect assets, another wants to grow them as quick as possible.

But there is one common thread amongst investors: spreading risk across different financial institutions, amongst different assets, and over different jurisdictions has become more critical than ever. Whatever forms it comes in – whether a simple savings account, storing metals, owning property, etc. – it is never too late to work on your jurisdictional diversification.

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