Bordered on all sides by Italy and dating its origins back to the 4thcentury AD, the parliamentary Republic of San Marino, with the help of some of the country’s leading names, is making waves in the international banking scene and bringing its unique brand of banking to all corners of the globe. Spearheaded by the country’s leading lenders, San Marino’s banking industry should be seen as equal to those in far larger and more developed countries in Europe and beyond.
Originally founded in 1980, Banca CIS – Credito Industriale Sammarinese (former CIS) is just one of the nation’s banks that has played an integral part in boosting the country’s international credentials and the wider restructuring process of San Marino’s financial services. Today, Banca CIS stands at the forefront of savings and investment landscape in San Marino.
The bank’s supervisory authority is the Central Bank of the Republic of San Marino (CBSM) and its anti money-laundering and terrorist financing body is the Financial Intelligence Agency (FIU). Both bodies ensure the bank’s practices are carried out in alignment with the most comprehensive international standards of compliance and transparency; the process, once completed, looks to align the country’s financial services industry with those in the principal international financial districts. With only seven banks in the country – down from 12 in 2007 – Banca CIS is the result of the merging and acquisition by a private bank, Banca Partner, of Credito Industriale Sammarinese in 2012 and the acquisition Euro Commercial Bank’s total assets in September 2013.
San Marino’s banking industry should be seen as equal to those in far larger and more developed countries in Europe and beyond
After the consolidation process was completed, Banca CIS’s total assets came to approximately €1bn and its reinforced organisational structure signalled the start of a new international development cycle in the bank’s life. On a much larger scale, however, consolidation among some of the country’s key firms has seen San Marino secure a place on the global banking stage and spread its influence beyond its borders. The recent enactment of the Foreign Account Tax Compliance Act (FATCA), the involvement of our Republic in negotiating and signing intergovernmental agreements, the opening of negotiations with the EU on the savings taxation directive, and the discussion of a possible association agreement are all good evidence of an international economic integration process.
Small state adopts globalisation
International integration has emerged as one of the single most defining characteristics of business in the 21st century, and San Marino, as has been the case with so many smaller nations, has set about following suit, focusing first on its financial services industry. In the last few years it has gained a greater degree of visibility by enforcing and being compliant with governance and regulatory international policies in accordance with the helpful suggestions given by international agencies, organisations or committees such as the IMF, OECD and MONEYVAL. By maintaining successful relationships with more than 100 countries, as well as an important network of double taxation agreements, Banca CIS is representative of the steps that have been taken to accommodate changes in today’s banking environment.
Considering the country’s size and relatively simplistic economic make up, globalisation has long seemed a distant concept for its inhabitants to grasp. And where once the global economy looked to San Marino for tourism and very little else, increasingly, businesses are passing through San Marino and beginning to grow curious of the small state’s economic and financial potential, in particular as a possible way to enter other European countries.
With a client base of 8,000 in a state of 32,000 inhabitants, Banca CIS’s retail department exercises a sizeable degree of influence in banking matters across San Marino and offers specialised services that are suitable even for those in emerging European, Asian and the Middle Eastern markets. San Marino’s trademark attention to hospitality has been translated into highly personalised asset management services, highly capable management, and fully-integrated consulting and family office services to match.
Banca CIS’s range of private banking products and services underscores the extent by which San Marino’s banking sector has developed as a whole. The country does not shy away from the world’s most complex challenges, and, as a result, wealthy clients looking for superior services are finding themselves attracted to San Marino’s culture of client dedication and responsibility.
Funding the future
San Marino’s banking climate boasts a number of distinct advantages over much of mainland Europe, namely a lower percentage rate of taxation on capital gains, as well as interests and financial instruments for both non-EU residents and local companies, meaning that margins are not squeezed to quite the same extent they otherwise would be.
Among the bank’s impressive achievements so far is that Banca CIS was the first company in the Republic to own an asset management company, Scudo Investimenti SG, which specialises in engineering and managing funds under Sammarinese Law. Scudo Inv. SG does not only produce standard funds, composed of shares and bonds, but combines a mix of instruments to meet the specific needs of any one single client or institution. These funds are subject to governance rules similar to those applied in most famous financial platforms; despite this their competitiveness in management costs is particularly high. The company also engineers private label funds for other asset managers and financial institutions.
Banca CIS’s innovative fund strategy also plays a decisive role in the development of new products, which has been instrumental in the bank’s rise to the top of San Marino’s financial services industry. Some years ago, Scudo Investimenti SG created the Scudo Arte Fund, a fund which invests in modern and contemporary art, in particular in Italian painters through 1900-1990, representing a period of modern art that is appreciated internationally and one that has performed particularly well in global markets.
In order to meet its ambitious objectives, Banca CIS is establishing partnerships with firms in other small states in Europe and entering into strategic alliances with other business operators or financial advisors located in the new emerging countries. The bank has begun considering the strengths and weaknesses of other consolidated financial industries all over the world and is developing a recruitment process aimed at finding international professionals. In line this new international approach, Banca CIS has recently started up a new asset management company in Monte Carlo, EFG & Partners Eurofinancière d’investissements, in a joint venture with EFG Bank (Monaco) to better develop asset and wealth management activities for top international clients.
So as to better understand these countries, and decipher the various ways in which there might be a cultural clash of sorts, Banca CIS has taken pains to interpret the market and the ways in which it might be able – or unable – to adapt in a new competitive context and for international customer needs. All things considered, Banca CIS’s speed and flexibility in adapting to perpetual market changes is unmatched, especially when considering it only has a staff of 90.
Technically and geographically gifted
Aside from the steps taken by Banca CIS to better financial services in San Marino, the country’s business landscape as a whole has gravitated towards highly personalised services, with the government having recently introduced new fiscal policies to incentivise new firms and investors looking to bring operations to the territory. What’s more, the development of the university and technology park looks capable of accommodating for a more challenging social and cultural environment, particularly for young and technologically savvy workers.
The changing complexion of San Marino’s banking system is underpinned, as with many other industries, by technology. The introduction of new high-tech enterprises to the country has brought with it a distinctly international perspective, and should aid in better integrating the small but smart society in the ever-evolving global economy.
Another facet that serves to favour San Marino is the country’s geographical positioning and opportunities outside of banking. Located only 20km from the international airport in Rimini and 100km from Bologna, with a high-speed railway network capable of reaching Milan and Rome within approximately two hours, the country boasts impressive transport links to key European cities. What’s more, the easy availability of residential and industrial buildings throughout San Marino, combined with the high standard of education and hospitality, makes the country an ideal destination for many reasons.
With globalisation in full swing, a number of smaller – though no less dynamic – countries are now beginning to discover what benefits they can offer to their far larger counterparts. Increasingly, developed and developing markets alike are looking to the Republic of San Marino to explore what economic and social opportunities are emerging there.
