The financial services industry is getting only part of the risk management and anti-money laundering point. And modern business models in banking and insurance militate against effective know-your- customer procedures says Nigel Morris-Cotterill of The Anti Money Laundering Network.
World-wide, regulators are including in the requirements they place on affected businesses demands that they build a profile of their customers.
This "know your customer" approach is vital in the attempts to detect and deter money laundering and terrorist financing.
Historically, many financial institutions have taken a narrow view of "know your customer." The basis for this is that, historically, banks in particular have wanted to know enough information to enable them to enforce their contract terms in cases of default or fraud. And so, whilst not going as far as "We know where your children go to school," "we know where you live" was generally seen as good enough.
