Thorough know your customer (KYC) practices are banking’s best defence against trade based money laundering (TBML) according to ANZ’s managing director for transaction banking, Mark Evans.

On a podcast he says banks must look to gain an intimate knowledge of their customers as a responsibility rather than a burden. 

Knowledge not paperwork

Evans says money laundering potentially jeopardises financial and economic stability, and that demands a collective response from the financial sector.

“That first line of defence is ultimately understanding and knowing who your customer is,” he said. “No matter what paperwork we look at and what systems we put in place, knowing what your customer is truly doing,…their source of funds, what their modus operandi is and who they deal with and where,” is vital according to Evans.

Knowing these things “gives us the ability to sniff out when something’s not quite right,” he says.

Beyond KYC

The podcast also features ANZ’s head of sanctions compliance, Dinesh Anand, who argues that due diligence should go beyond KYC and incorporate know your customers’customer’ (KYCC).

Anand says that bankers should also know what products customers are involved with and that this should give banks an even better sense of their customer base.

The podcast with Mark Evans and Dinesh Anand can be found here.

Categories: Trade Based Financial crimes News