Also known as bank secrecy or bank privacy, anonymous banking refers to the use of numbered bank accounts that protect a bank customer’s personal information. Bank secrecy is legal in certain countries, most famously Switzerland.

The Swiss Banking Act of 1934 created what we know as bank secrecy today. The act was founded after several famous French personalities were accused of tax evasion. This scandal revealed that numerous politicians, industrialists, publishers, and judges (to name a few), were hiding money in Switzerland accounts. Thanks to the law, Switzerland can limit the amount of information it shares with third parties in regards to its bank clients. Furthermore, foreign governments, the Swiss government, and tax authorities are also limited to this critical information.

Anonymous banking has become easier in recent years thanks to improvements in financial cryptography and anonymous digital bearer certificates.

In 1970, the United States formed its own Bank Secrecy Act. The BSA, however, is quite different from Switzerland’s. All financial firms are required to help government agencies detect and prevent acts of money laundering under the BSA. The act was also created to cut down on tax evasion and other criminal activities. The IRS features a detailed section on its Web site about the BSA and how it is used to protect the nation from terrorism.

Bank privacy boasts a tremendous benefit to people and organizations that need or want to conceal money. Some reasons why someone would utilize anonymous banking include:

Hide money from family, friends, or even a spouse
Hide embezzled money
Tax evasion
Tax resistance
Hide money from an employer
Privacy from the press (i.e. to avoid being listed on a “rich list” in a magazine)
Basic privacy purposes
To avoid solicitations from charities, family members, and salesmen
Litigation protection
To prevent the confiscation of funds (i.e. during bankruptcy)
Protection from kidnappers and other criminals who may try to exploit the account holder for money

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