Why are banks so demanding today with their due diligence processes?

[Italkcash News]

One couldn't help but wonder how much more information are the banks going to require from us... Opening a bank account was simple a couple of years ago. Today it is a nightmare, all the due diligence procedure that a customer has to go through are insane. (God forbid if you want to open a company account).

Why did all that happen? Is it helping banks to prevent scam? Is it helping banks to prevent money laundering? Is it helping banks to detect terrorists? So many questions, and in the same time so little answers. It is said that the due diligence processes were invented after the 9/11 attacks - the concept of 'get to know your client' appeared.

Opening a company account has became a rather lengthy and very 'personal' procedure. The banks require the company Directors and Secretary to be present at the bank, with their passports and all supporting documents as proof of identity. Couple of years ago this was not required - due diligence procedures were so much more simple. Banks did not need to meet everyone in person and identify them. Swiss banks were satisfied with the presentation of a photocopy of the Director's and Secretary's passports.

But things changed... The financial world is so much more different today. All these procedures enable the banks to know their clients, and if a problem occurs (scam, fraud, terrorism) they are able to identify the people behind it. The option of hiding behind a company account, stealing money, and disappearing is not there any more. It is much easier for a bank to track down their clients, create account histories and feel more secure.

It should be admitted that the system works better. However as with every system, there are pitfalls. All bank officials are trained and taught to work by this so called 'system' and they forget that in some cases they might need to use their brains rather than be limited within the check boxes appearing on their screens.

Systems are good to follow but somehow in today's world they are trying to omit the human factor. So I really won't be surprised if we are asked for a blood sample soon, proving that the passport and all the documentation provided is really, but really yours. Then we can get the Holy Grail - our bank account.

Hopefully all these procedures do help, however people also get more creative and ultimately they do reach their goals somehow - no matter how good the system,scam will continue to exist. So instead of creating a system in a system, with ridiculous requirements banks can invest in hiring people who use their brains for something more than calculating their annual bonus.

If you want to check out more about banks, accounts, money transfers and financial related subjects browse the forum topics within the section you are interested in.