Know Your Customer

Situation

  • Since the financial crisis, banks have been subject to a hardening of their regulatory framework
  • The third Anti-Money Laundering European directive, transposed in the Belgian regulation, imposes banks to carry customer due diligence measures, which can be divided into three categories:
    1. Standard customer due diligence : checking of the identity of customers, and challenge of the information received by the clients on the basis of data obtained from reliable and independent sources.
    2. Simplified due diligence : for the low risk customers
    3. Enhanced due diligence : for customers which by their nature can present a higher risk of money laundering or terrorist financing
  • FATCA and AEOI treaties force the banks to cooperate with tax authorities
  • Following its acquisition by the French group BNP Paribas Fortis must implement the compliance standards of the group

Tasks

  • Upgrading BNP Paribas Fortis compliance policies to match the group rules
  • Periodicity of the customer due diligence on existing clients
  • Adoption of the BNP Paribas KYC documents
  • Exit procedures
  • Strengthen the reputation and integrity of BNP Paribas Fortis
  • Implementation of an effective screening on existing companies and prospective customers.
  • Identification of the client
  • Acceptance of clients
  • Customer Follow Up
  • Control of transactions

Actions

  • Implementation of a scoring risk for each client based on business activities and customer products
  • Implementation of a client review process, on periodic basis depending on the risk of their profile. Thousands of customers are reviewed
  • BNP Paribas Fortis requires greater transparency from its customers (the identity of their ultimate beneficial owners, of their suppliers, their shareholding structure, their actual activities, and their links with countries under embargoes)
  • Implementation of processes to simplify account openings, which in the meantime were become more complex
  • Implementation of filters based on transactions
  • Creation of tools to promote better collaboration and exchange of information between different departments of the bank
  • Implementation of reporting tools

Result

  • BNP Paribas Fortis knows who its clients really are
  • BNP Paribas Fortis reputational risk is mitigated more efficiently
  • BNP Paribas Fortis is level with other group entities
  • Better collaboration between BNP Paribas Fortis and foreign tax authorities