There are many concepts that financial institutions utilize when they are seeking to “know your customer“.  This policy is one that will ensure that any person or business that they become involved with is honest and ethical, and practices their businesses in such a manner. One aspect that will be necessary in all businesses and financial transactions is the transparency of those transactions and all of the documents surrounding them.  This just means that nothing is kept hidden.  In the political world this goes so far as the personal lives of the officials and the politicians.

When it is known that all that one does will be there for others to see, many people will be more likely not commit acts that are either unethical or illegal.  In the financial world, this is also to ensure that no illegal activities are taking place.  Banking institutions can not afford to have their institutions connected to acts such as money laundering or terrorist funding.  Not only is it just not good for business, they themselves will be prosecuted should they come under investigation.  This legal action will also extend to an institution and the employees should they not have the proof that they did thoroughly investigate a client that did commit a crime.  If documents are not kept, if due diligence is not practiced they will be held responsible, even if they were not aware that the activity was taking place.  Improper risk management is no defense in a court of law.

This has offended some clients and foreign officials in the past, as they see it as an accusation of guilt, but without this process, banks are not legally allowed to conduct any sort of business with foreign companies if they should refuse to answer the questions that they are asked, or should they refuse to allow their documents to be looked over and investigated.  Know customer not only protects financial institutions from various acts of corruption, it will serve to protect their innocence should they be called upon to do so.

Related posts:

1. Corruption, Terrorist Financing, and Internet Scams
2. Excellent Customer Service Takes Assistance a Step Further
3. Creating the Perfect Property Management Team
4. Online Reputation Management and Advertising
5. Why You Should Care About Corruption

This entry was posted on Monday, September 14th, 2009 at 12:46 pm and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.