Do You Know Your Customer?
FinCEN says that “Banks specifically are expected to “obtain information at account opening sufficient to develop an understanding of normal and expected activity for the customer’s occupation or business operations.” In short, to understand the types of transactions in which a particular customer would normally be expected to engage necessarily requires an understanding of the nature and purpose of the customer relationship, which forms the baseline against which aberrant, suspicious transactions are identified. It was this fundamental expectation that FinCEN sought to encapsulate in its articulation of the third element of Customer Due Diligence. Other relevant facts could include basic information about the customer, such as annual income, net worth, domicile, or principal occupation or business, as well as, in the case of longstanding customers, the customer’s history of activity. “
How important is the new account interview to completing the third element of Customer Due Diligence? Critical!
The New Account Interview has become critical to establishing the third element of Customer Due Diligence. There are also many other regulatory and compliance issues that get addressed in the first minutes we meet a new customer—both personal and business. During this program we will examine the compliance elements of the new account interview.
Part I Personal Accounts
- Nature and purpose of the account
- Identification on consumers
- Establishing tax home
- Asking transaction questions
- Product Disclosures
- Regulatory Disclosures
- Placing holds
- Overdraft privilege
- Risk rating the customer
Part II Legal Entity Accounts
- Nature and purpose questions
- Products and Transactions
- Special risk questions-MSBs, MRBs, TTTPs etc
- Beneficial owners and controlling person
- Business account documentation
WHO SHOULD ATTEND?
New Accounts, Personal Bankers, Branch Administration, Deposit Operations, CIP Managers, BSA Officers, Training and Business Development Personnel