Among the genera public, the term “banking” most often refers to the everyday management of money in checking and savings accounts with so-called retail banks. However, there is also a niche category of banking known as private banking, which caters exclusively to High Net Worth Individuals (HNWI)-people with the equivalent of over $1million in investable assets.
  Within the private-banking market, there is further segmentation into two sectors-the offshore sector, wherein individuals keep their money in a country not their own, and the onshore sector, wherein a country's citizens place their money domestically, Individuals are drawn to accounts located in so-called offshore centers such as Switzerland and Bermuda by the banking secrecy and tax-savings opportunities available in these loosely regulated foreign jurisdictions.
  While most analysts agree that private banking overall will continue to grow at a rapid rate, they also express doubt that the off- shore sector can sustain the growth it has enjoyed in the recent past. Over the past few years, the quality of onshore private banking services has improved considerably, due in part to increased political stability and lessened currency volatility. Moreover, offshore tax havens have been the target of criticism by regulatory agencies around the world, which is leading to tighter regulation of some prominent offshore centers.
  What is the offshore center to do? Many off shore centers have begun to take steps to strengthen reporting requirements in an attempt to alleviate fears that these tax havens are also hotbeds for money laundering. Yet, in the process, offshore private banks' primary competitive advantage ever their onshore counterparts will surely be weekend. The degree to which offshore banks are able to satisfy the needs of their existing clientele and simultaneously attract new wealth will determine not only their own fate, but also the future financial livelihood of the foreign countries in which they are located.