Why do account-opening money laundering steps vary so much?

MarkTheMark

Hello,

I have some money mostly from an inheritance 5 years ago at I've had in Barclays, then in Chase (better rate), and now that the rate is ended, I am looking to move the money to another instance access savings account with a decent rate.

What I am finding is there is a massive difference between the how banks allow me to open accounts - for example Charter Savings have made it really simple and asked very few questions.

But Saga (slightly better rate) is wanting me to trawl back through my probate and accounts from years ago (which is complex and rather sad for me)

Both Chase and Barclays were also no problem. Only Saga seems to be hyper-diligent.

I am left confused - is it that Saga are actually doing the job properly and I should persevere with them (I note their TrustPilot reviews are very bad, but a lot of that is about the time taken to open accounts), or can I assume that Chase, Charter Savings etc. are fine/correct (ultimately I can 100% prove I'm not laundering money, but it's just not as straight forward in my situation as it might be for some)

I just want a simple and safe instance access savings account with a decent rate, but obviously I want to do the "right thing"

I believe that all of these banks are good well-regulated banks (no?). What are thoughts here? Is there a right or a wrong? Or is it just a grey area and I very much up to me?

eskbanker

Probably worth reading the discussion on this thread:

https://forums.moneysavingexpert.com/discussion/6676808/why-does-marcus-by-goldman-sachs-want-inheritance-documentation-for-opening-a-4-90-fixed-bond

Albermarle

If it was me, I would go for the ones asking the least questions due to the reduction in the hassle factor.

However it could well be in future that providers that seem more relaxed today, may not be in future.

masonic

Some banks have received large fines for not being diligent enough and that tends to have a reaction. Also rules are being tightened year by year, with a phased roll-out in some cases. The issue is that the regulations aren't prescriptive, so requirements are often rather nebulous, with the onus on the firm to make sure its measures would be considered adequate, rather than providing a concrete standard.

Checks are based on thresholds, risk, with an element of randomness mixed in, so anyone can potentially be subject to enhanced checks.

"I just want a simple and safe instance access savings account with a decent rate"

Such a product does not exist. No firm operating lawfully can guarantee instant access to your money, because there are circumstances in which they must deny access to comply with their legal obligations.

MarkTheMark

So, I think it was worth persevering. They did open my Saga account and tbh it seems like a pretty decent system.

Simple web app. 2 factor authentication. Instant transfer from Barclays and back again.

Monthly interest paid daily. 4.5% AER (bonus for 1 year though - so will need to rethink in a year)

Main disadvantage is that there is a £20k withdrawal per day (which can be raised) and it HAS to be in increment of no more than £10k which could get annoying when it comes to take it all out next year.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6676884/why-do-account-opening-money-laundering-steps-vary-so-much

Because the law doesnt define what exactly they must do but instead says things like they must "identify the customer unless the identity of the customer is already know and has been verified" or "a relevant person must have in place appropriate risk-management systems and procedures to determine whether a customer or the beneficial owner of a customer is a politically exposed person"

So its down to each bank to decide how they are going to go about verifying the identity of its customers to meet the legal requirement or what they deem to be appropriate. The problem then is lots of banks have had big fines for not doing well enough so people in the banks review their approaches and adjust so they dont get a big fine too.

The advantage of legislation drafted this way is it doesnt need changing every couple of years as the tools and world evolves but it means there are inconsistencies becase of the different interpritations. If the laws were prescriptive there would be a major problem for government just to keep the laws up to date.

MEM62

Each bank is a separate commercial entity and they make their own decisions in regard to commercial practices and policies. There is no reason to expect that the on-boarding process for each would be the same.

artyboy

https://forums.moneysavingexpert.com/discussion/comment/82079754#Comment_82079754

In addition to that, the actual laws and regulations around money laundering prevention are not especially prescriptive, and instead focus on the outcomes that financial institutions need to achieve.

There is some fairly detailed industry guidance (specifically by the JMLSG) but even so there is a lot of latitude for FIs to determine their own approach to how they satisfy themselves you're not a wrong'un