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Know Your Customer, Part VII

When you open a new account, you are asked to verify the information on the account, and absolutely identify the applicant who is sitting by your desk. Unless you have a crystal ball, or a magic chair that only allows people that sit in it to tell the truth, you're going to have a tough time doing that.Your financial institution expects you to open accounts-otherwise, you won't be in business long. But it's important that you only open GOOD accounts. So you are asked to "verify" the information. The government puts it a little differently. They say you should "Know Your Customer".

We'd like to give you some hints on how to do some of that verification. We're not going to try to make you into a master investigator, but instead just pass on some tried and true tricks that work.

First, if you remember, on a previous training page we suggested that, if possible, you'll have the chair the applicant will sit in by the side of your desk, so that you can see the "whole" person and not just the part of them that appears above the desk. This is important. If your work station is such that you open an account by entering information on your computer screen, and your back is to the person you are interviewing...change the furniture! You want the interview area so that you can observe the person for whom you are opening the account.

Have a checklist of the things you want to observe.
After the person leaves is not the time to think to yourself, "Darn-I never noticed whether he was nervous or itchy or not," or, "I meant to watch and see how she acted when she answered questions." We went over some of the "giveaway" body language on Training Page 11. Go over them, and make a checklist from them similar to the one we did above. Tape it to the inside of your drawer, or the side of your keyboard, and refer to it occasionally during the interview. (Or, as one new accounts person does who uses the computer screen to open accounts- reduce the size of the list below on your copier and tape it along side of your screen. Then either write down reactions every now and then-or add them on your screen as you're working.)

Jot down numbers you've assigned for each thing you want to observe. For instance, let's say your checklist reads:

  1. Fidgets
  2. Uncomfortable
  3. Hesitant
  4. Repeats Questions
  5. Hand over mouth
  6. Shift/Bounce
  7. Nervous
  8. In a hurry
  9. Too good-Too friendly
  10. Asking a lot of the wrong questions

Let's also assume you've assigned letters to your reactions.

A. Not at all: Super, No Problem
B. Some: but with reason, OK
C. A lot: better check, Not too cool, but maybe OK
D. Too much: I don't like this
E. Constant: This person is a crook!

While you're filling out the application, just glance at the list and at the applicant every now and then, and jot down your reaction and observation.

Suppose, after the person left, you looked at your notes and saw 1-A,2-A,3-A, 4-B (hard of hearing), 5-A, 6-A, 7-B, 8-B, 9-A, 10-B. If I were evaluating your reaction, I'd say your grandmother was in opening an account!

However, suppose after the applicant left, you found you had a complete application. The generous opening deposit was in cash and everything looks to be in order. All information and identification looked authentic. On paper, it looks like a good account. But when you looked at your reaction sheet you saw 1-C,2-C,3-A,4-B,5-C,6-C,7-D, 8-D,9-E,10-E. With that kind of evaluation, it's time to do some digging, verifying and close watching of the account.

If you use account opening verification services, check carefully for other financial institution inquiries on the same name and social. Mark your calendar five days from the day you open the account, and call back to verify the same information. You may have been the first financial institution in a series of openings by the same individual.

In some cases, you're going to want to go the "second mile" in order to verify. You always obtain a street address for a customer-to-be, even if they want their mail sent to a Post Office box. Only in cases of Rural Route service is there no street address. If a "suite" number or a Post Office box number has been given, take out your telephone book, turn to the pages in the back that list services and look up "Mail Service" to see if there are any in your area. If there are, see if any of the addresses match the address on the account you just opened. If so, your applicant is using a mail drop. Not good!

Send out a "we're-glad-you-opened-an-account-with-us" letter the same day you open the account. Put your name and telephone number on it as the person to contact if there are any questions. If an impostor has used the name of the person who gets the letter, you'll know pretty quickly that it's a bad account. Alert your tellers, AND someone in bookkeeping to keep an eye on the account and to alert you to any unusual activity. Put the account on referral for a few weeks, so that you can keep your eye on it. Statistics show that most fraudulent accounts go bad within 90 days.

Copyright © 1995 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 6, No. 1, 9/95

First published on 09/01/1995

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