Initiatives and reports concerning financial institutions

08 March 2013

In October, the BCBS issued guidance to banks and banking supervisors on customer due diligence processes. The BCBS noted that supervisors are increasingly recognising the importance for banks of adequate controls and procedures for customer identification. This is necessary not only to comply with anti-money laundering legal requirements, but from a wider prudential perspective. Without due diligence, banks can become subject to reputational, operational, legal and concentration risks, which can result in significant costs. To guard against these risks, the report recommends that banks develop policies and procedures in key areas such as customer acceptance, customer identification and monitoring of high-risk accounts.