Why banks need to keep updated customer information |29 April 2016

In order to protect customers and secure the integrity of the financial system, commercial banks operate under a highly regulated environment.

In this regard, Barclays would like to reiterate to our customers and other stakeholders the importance of global regulatory legislation and the requirements it places on banks and their customers across the world. In particular, we would like to focus on the Know Your Customer (KYC) requirements as well as the Anti-Money Laundering (AML) Act.

KYC regulations are governed under the AML laws which are not unique to Seychelles and require banks to know customers and their businesses to a deep level. Banks are required to hold documentation that will evidence that customers  are who they  say they are, that they really live where they state they  live, and also understand where and how their capital or funding is generated. Therefore, under legal obligation and global regulatory governance, Barclays will regularly request our customers to provide documents that: Identify our customers (this can include passport and national identification cards), confirm their residential address (this could be a utility bill, an account statement from another bank or a letter from your employer confirming your address) and provide us with proof of funds (for example a salary slip or copy of employment contract).

This documentation is personal and Barclays has comprehensive and secure governance policies and processes in place to keep your information safe and confidential.

Failing to adhere to KYC regulations under the international Anti-Money Laundering laws or failing to regularly update this information can hold dire consequences for both banks and their customers. Banks can be fined by regulators with extremely large and crippling fines, with a possibility of losing their trading license. Many banks across the world have already incurred fines for not complying with KYC regulations.

The AML Act of Seychelles, in line with the international ALM laws, requires banks to implement very specific processes to prevent money laundering activities. The Act also requires banks to obtain from their customers, very specific information like: What is the source of wealth? What is the source of funds? What is the nature of business activity?

It is important to keep in mind that compliance with AML requirements by banks across the world is important to create a safe financial services environment for our customers to transact within. This may sometimes be perceived as banks asking too much information from our customers.  Unfortunately, the required documentation under the AML Act has increased to ensure we comply and minimise potential AML activities. Adherence to the requirements protects both the bank and the customer.

Failing to comply with AML legislation can lead to serious fines for financial institutions, jail sentences for their employees as well as reputational risk. Customers who fail to comply with AML Legislation will not have transactions processed and can be investigated by the Financial Intelligence Unit (FIU), or have their funds confiscated under the law.

Barclays would like to remind all stakeholders that KYC and AML legislation and regulations are not just a Seychelles’ issue, but an international regulatory requirement governing all banks in all jurisdictions across the world.

Although the request for updated KYC information is not always appreciated by customers, it is a necessary part of global governance and assists in making banking safer for all.