Why does a Private Banker ask clients questions about certain transactions?
As a client of ABN AMRO Private Bank, your Private Banker may ask you questions about a particular transaction. We initiate this dialogue with you for just one reason. In this article, we would like to give you some more information about the Anti-Money Laundering (AML) activities and systems at our bank, all aimed at combating money laundering. We will do this through an interview with Marijn van Paassen, Head of AML Compliance.
Why does a Private Banker ask clients questions about certain transactions?
As a bank, we sometimes have to ask our clients questions when a payment or a transaction pattern doesn't match what we expect to see. This might indicate that the client has fallen victim to fraudsters. In a case like this, we call the client and ask for confirmation that it is a legitimate transaction before we actually execute it. This makes things safer for both the client and the bank.
An unusual transaction could also indicate money laundering. Only rarely will this actually be the case, but it is part of the bank's job to be alert to the risk, and to be able to explain transactions properly.
What exactly is money laundering?
Money laundering means disguising the criminal origins of money. Criminality and its associated cash flows have a hugely disruptive effect on society. It creates an unfair playing field and puts pressure on the people and companies who want to work within the rules of the game for the market.
What is the Anti-Money Laundering Directive?
The underlying criminality is a cross-border problem, and therefore international initiatives are needed in the fight against money laundering. The European Commission launched an Anti-Money Laundering Directive back in 1991, and this was then incorporated into the national legislation of all Member States. In Belgium, this is how the money laundering law of 1993 came about. The European Anti-Money Laundering Directive has been updated several times over the years, and Belgian legislation evolves with it each time. The fifth version of the European Anti-Money Laundering Directive is the one that's now in force. And it will continue to evolve, as the entire financial sector constantly evolves.
What is the role of banks in general, and ABN AMRO in particular, in preventing money laundering?
Banks have a very important role to play in combating money laundering. Banks are the gatekeepers to the financial system. The legislator has given us a duty to protect the integrity of that financial system, and the regulators ensure that banks carry out this task properly. But that's perhaps putting it too formally. I think it's also our moral duty, and that our clients also expect this from us. ABN AMRO's mission statement is 'Banking for Better, for generations to come'. A mission statement like that isn't credible if you, as a bank, don't accept your social responsibilities.
What else does ABN AMRO do to prevent money laundering?
In essence, it comes down to stopping as many unusual transactions as possible, when the bank suspects they are related to money laundering. In order to know whether a transaction is unusual, you first need to know what a normal transaction looks like for the client in question.
I'm sure the Know Your Customer principle comes in handy here?
Every client is different, so a one-size-fits-all approach isn't enough. That's why we deliberately apply our Know Your Customer principle, which means we analyse any given client as a whole. Where does the client's wealth come from? How does this wealth reach the bank? Which products does the client wish to purchase? How are these products used? These are all things we need to know and keep a record of. So yes, we do ask our clients a lot of questions. But it's necessary to do our job properly.
Thank you for the explanation, Marijn.
So, if your Private Banker or someone else from the bank asks you for more information about a particular transaction some day soon, you'll know that this is entirely for your own benefit.