These are pretty competitive rates for 1, 2 and 3 year fixes, Richard. Highly respected financial institution as well - they have chunks of my cash on fixes.
Yes its going in an Investec one year, not least as I already have a chunk with them so I don’t have to go through the tiresome “know your customer” charade. But they only have a 7 day window and NS&I like to think about it before releas8ng your money, so I hadn’t set it up yet. Was nervously checking their rate in the last month. 5.15% is decent especially as it is replacing 3.9%. I expect this will be the last maturing bond where the replacement has a higher rate. Well of course it wasnt going to last but it looks like two full years of solid no-risk returns from cash. Just what us old gits need.
Why do you refer to it as a charade?
Having worked on the technical side of KYC systems, I can confirm it is a charade.
One example, peps and sanctions checks. 3 companies I have worked in all they do is a fuzzy search comparing first and last name against a list of politically exposed or sanctioned person. This is the extent of the check. If you match, some further evidence / checks required, if no match, carry on regardless. Bad news if your name is Vladimir Putin, ok for everyone else.
The checks are so basic (when being executed at volume) that they are laughable when compared to most modern technology. They should at least take other factors into account (DOB, residential address are two basic examples).
Not my experience working in financial services at all.
The checks are extensive and do include multiple factors.
What checks do you believe Investec or any similar company do with the info supplied to them by a new customer wishing to open a 1 year fixed cash bond? As I recall it included me having to use some creaky software to upload both sides of my driving licence.
My issue is that if I were some byznysman from Tashkent or somewhere similar requiring discreet personal banking services from some London based bank, I don't think i would be subjected to that, because the monthly fee I would be paying for this discretion (completely off the table for us normal citizens) would magically obviate the need for such trivia. Would it not?
The authoritative stories that London remains the banking location of choice for dodgy money despite all the rhetoric, and while ordinary citizens have to upload most of their regular utility bills just to open a current account, really piss me off.
Nonsense.
All UK regulated banks will do the required KYC. The fee you pay won’t change that.
Why is it a charade to provide proof of identity and verification?
Money laundering is very real and nasty individuals need to be stopped / prohibited. Of course people may have escaped detection but that’s not the point. Real criminals (not all) are able to be identified and caught.
If anything the bigger the client / the more money involved will heighten the due diligence performed.
For the more run of the mill retail customers it is relatively light touch to be aligned to the level of risk.
Of course. Nothing to see here Clearly it's all my fault for reading lefty rags like ..er.. the Economist
The article does not say the banks are the biggest problem (it's the law, both lawyers and credulous judges) but the banks are cited and quite obviously the due diligence is completely inadequate.
I'll give you another reason for my cynicism at a more mundane personal level. I'm with HSBC, have been since they were the Midland Bank. Admittedly now they have made their banking app work reasonably well, they have stopped the following charade, but up until about two years ago, if I moved a couple of chunks of money out of my current account, say 2x £10k, in one day, I could almost guarantee that my mobile would ring, and there was a bloke grandly announcing himself as from the fraud department. Then he would tell me we would need to go through some security ID questions which I thought a tad presumptuous, when he was calling me rather than the other way round. And then I would have to somehow assure him that yes, I made those transactions, and they are according to my wishes. And then I would say to myself, OK, it's a bit clumsy but they are doing it for my own good. Until one day after the umpteenth time, a thought occurred to me: They only ever call about an outgoing transaction. In nearly all cases the money had only recently come in - I don't keep 20k plus in a current account. Yet never, not once, did they call me to enquire about an incoming transaction. I suppose it would be a difficult call, because they'd have to ask a customer about the source of this money; but my point is, they could see this money coming in only recently so why should they be remotely surprised, let alone concerned, when it moves out again a few days or weeks later? That is also why I used the word "charade".
Sorry I don’t get your point. I work in this field so do know the subject matter.
Incoming payments are screened and could be held up or investigated if suspicious.
Don’t also forget the payment to you was also subject to that financial services institution applying checks and balances.
You paying the money away is checked for your own safety to ensure you are not being the victim of fraud.
Source of funds is queried from time to time and when triggers are breached and particularly on opening new accounts with an institution.
You earlier cited the KYC checks as a charade. I still can’t agree with that.
These are pretty competitive rates for 1, 2 and 3 year fixes, Richard. Highly respected financial institution as well - they have chunks of my cash on fixes.
Yes its going in an Investec one year, not least as I already have a chunk with them so I don’t have to go through the tiresome “know your customer” charade. But they only have a 7 day window and NS&I like to think about it before releas8ng your money, so I hadn’t set it up yet. Was nervously checking their rate in the last month. 5.15% is decent especially as it is replacing 3.9%. I expect this will be the last maturing bond where the replacement has a higher rate. Well of course it wasnt going to last but it looks like two full years of solid no-risk returns from cash. Just what us old gits need.
Why do you refer to it as a charade?
Having worked on the technical side of KYC systems, I can confirm it is a charade.
One example, peps and sanctions checks. 3 companies I have worked in all they do is a fuzzy search comparing first and last name against a list of politically exposed or sanctioned person. This is the extent of the check. If you match, some further evidence / checks required, if no match, carry on regardless. Bad news if your name is Vladimir Putin, ok for everyone else.
The checks are so basic (when being executed at volume) that they are laughable when compared to most modern technology. They should at least take other factors into account (DOB, residential address are two basic examples).
Not my experience working in financial services at all.
The checks are extensive and do include multiple factors.
What checks do you believe Investec or any similar company do with the info supplied to them by a new customer wishing to open a 1 year fixed cash bond? As I recall it included me having to use some creaky software to upload both sides of my driving licence.
My issue is that if I were some byznysman from Tashkent or somewhere similar requiring discreet personal banking services from some London based bank, I don't think i would be subjected to that, because the monthly fee I would be paying for this discretion (completely off the table for us normal citizens) would magically obviate the need for such trivia. Would it not?
The authoritative stories that London remains the banking location of choice for dodgy money despite all the rhetoric, and while ordinary citizens have to upload most of their regular utility bills just to open a current account, really piss me off.
Nonsense.
All UK regulated banks will do the required KYC. The fee you pay won’t change that.
Why is it a charade to provide proof of identity and verification?
Money laundering is very real and nasty individuals need to be stopped / prohibited. Of course people may have escaped detection but that’s not the point. Real criminals (not all) are able to be identified and caught.
If anything the bigger the client / the more money involved will heighten the due diligence performed.
For the more run of the mill retail customers it is relatively light touch to be aligned to the level of risk.
Of course. Nothing to see here Clearly it's all my fault for reading lefty rags like ..er.. the Economist
The article does not say the banks are the biggest problem (it's the law, both lawyers and credulous judges) but the banks are cited and quite obviously the due diligence is completely inadequate.
I'll give you another reason for my cynicism at a more mundane personal level. I'm with HSBC, have been since they were the Midland Bank. Admittedly now they have made their banking app work reasonably well, they have stopped the following charade, but up until about two years ago, if I moved a couple of chunks of money out of my current account, say 2x £10k, in one day, I could almost guarantee that my mobile would ring, and there was a bloke grandly announcing himself as from the fraud department. Then he would tell me we would need to go through some security ID questions which I thought a tad presumptuous, when he was calling me rather than the other way round. And then I would have to somehow assure him that yes, I made those transactions, and they are according to my wishes. And then I would say to myself, OK, it's a bit clumsy but they are doing it for my own good. Until one day after the umpteenth time, a thought occurred to me: They only ever call about an outgoing transaction. In nearly all cases the money had only recently come in - I don't keep 20k plus in a current account. Yet never, not once, did they call me to enquire about an incoming transaction. I suppose it would be a difficult call, because they'd have to ask a customer about the source of this money; but my point is, they could see this money coming in only recently so why should they be remotely surprised, let alone concerned, when it moves out again a few days or weeks later? That is also why I used the word "charade".
Sorry I don’t get your point. I work in this field so do know the subject matter.
Incoming payments are screened and could be held up or investigated if suspicious.
Don’t also forget the payment to you was also subject to that financial services institution applying checks and balances.
You paying the money away is checked for your own safety to ensure you are not being the victim of fraud.
Source of funds is queried from time to time and when triggers are breached and particularly on opening new accounts with an institution.
You earlier cited the KYC checks as a charade. I still can’t agree with that.
Interesting debate. Nick is quite right about the processes in place nowadays, although I would take issue that the bank is checking payments 'for your own safety'. It's because they know they will mostly be held responsible and, from October and the introduction of Authorised Payment Protection rules, will almost always be held responsible.
I have a lot of sympathy with the banks for this one. Some years ago HSBC and Citibank, being the biggest global commercial banks, were asked to close down clients where they couldn't prove the source of their funds or end up with billions in fines and bankers in orange jump suits. So, they both planned to pull out of countries the Stans and large parts of Africa. Then they were told not to exit these countries. In the end, the authorities realised it was better that their own banks had some sight of the flows, rather than 'bad actors' filling the void.
I'd love to know the stats, as to whether all these rules have impacted money laundering. I understand the perception that it's just rules for the sheople that makes our lives harder but with no discernible affect on the wolves it is ostensibly aimed at.
The proliferation of Turkish barbers is a good example of organised crime blatantly operating under the noses of the law with apparently (until recently) no comment, let alone action.
A good friend of mine, and occasional visitor to the Valley, just retired as the global head of financial crime for HSBC and is writing a book. I'll see if I can get an objective view from him.
These are pretty competitive rates for 1, 2 and 3 year fixes, Richard. Highly respected financial institution as well - they have chunks of my cash on fixes.
Yes its going in an Investec one year, not least as I already have a chunk with them so I don’t have to go through the tiresome “know your customer” charade. But they only have a 7 day window and NS&I like to think about it before releas8ng your money, so I hadn’t set it up yet. Was nervously checking their rate in the last month. 5.15% is decent especially as it is replacing 3.9%. I expect this will be the last maturing bond where the replacement has a higher rate. Well of course it wasnt going to last but it looks like two full years of solid no-risk returns from cash. Just what us old gits need.
Why do you refer to it as a charade?
Having worked on the technical side of KYC systems, I can confirm it is a charade.
One example, peps and sanctions checks. 3 companies I have worked in all they do is a fuzzy search comparing first and last name against a list of politically exposed or sanctioned person. This is the extent of the check. If you match, some further evidence / checks required, if no match, carry on regardless. Bad news if your name is Vladimir Putin, ok for everyone else.
The checks are so basic (when being executed at volume) that they are laughable when compared to most modern technology. They should at least take other factors into account (DOB, residential address are two basic examples).
Not my experience working in financial services at all.
The checks are extensive and do include multiple factors.
What checks do you believe Investec or any similar company do with the info supplied to them by a new customer wishing to open a 1 year fixed cash bond? As I recall it included me having to use some creaky software to upload both sides of my driving licence.
My issue is that if I were some byznysman from Tashkent or somewhere similar requiring discreet personal banking services from some London based bank, I don't think i would be subjected to that, because the monthly fee I would be paying for this discretion (completely off the table for us normal citizens) would magically obviate the need for such trivia. Would it not?
The authoritative stories that London remains the banking location of choice for dodgy money despite all the rhetoric, and while ordinary citizens have to upload most of their regular utility bills just to open a current account, really piss me off.
Nonsense.
All UK regulated banks will do the required KYC. The fee you pay won’t change that.
Why is it a charade to provide proof of identity and verification?
Money laundering is very real and nasty individuals need to be stopped / prohibited. Of course people may have escaped detection but that’s not the point. Real criminals (not all) are able to be identified and caught.
If anything the bigger the client / the more money involved will heighten the due diligence performed.
For the more run of the mill retail customers it is relatively light touch to be aligned to the level of risk.
Of course. Nothing to see here Clearly it's all my fault for reading lefty rags like ..er.. the Economist
The article does not say the banks are the biggest problem (it's the law, both lawyers and credulous judges) but the banks are cited and quite obviously the due diligence is completely inadequate.
I'll give you another reason for my cynicism at a more mundane personal level. I'm with HSBC, have been since they were the Midland Bank. Admittedly now they have made their banking app work reasonably well, they have stopped the following charade, but up until about two years ago, if I moved a couple of chunks of money out of my current account, say 2x £10k, in one day, I could almost guarantee that my mobile would ring, and there was a bloke grandly announcing himself as from the fraud department. Then he would tell me we would need to go through some security ID questions which I thought a tad presumptuous, when he was calling me rather than the other way round. And then I would have to somehow assure him that yes, I made those transactions, and they are according to my wishes. And then I would say to myself, OK, it's a bit clumsy but they are doing it for my own good. Until one day after the umpteenth time, a thought occurred to me: They only ever call about an outgoing transaction. In nearly all cases the money had only recently come in - I don't keep 20k plus in a current account. Yet never, not once, did they call me to enquire about an incoming transaction. I suppose it would be a difficult call, because they'd have to ask a customer about the source of this money; but my point is, they could see this money coming in only recently so why should they be remotely surprised, let alone concerned, when it moves out again a few days or weeks later? That is also why I used the word "charade".
Sorry I don’t get your point. I work in this field so do know the subject matter.
Incoming payments are screened and could be held up or investigated if suspicious.
Don’t also forget the payment to you was also subject to that financial services institution applying checks and balances.
You paying the money away is checked for your own safety to ensure you are not being the victim of fraud.
Source of funds is queried from time to time and when triggers are breached and particularly on opening new accounts with an institution.
You earlier cited the KYC checks as a charade. I still can’t agree with that.
Interesting debate. Nick is quite right about the processes in place nowadays, although I would take issue that the bank is checking payments 'for your own safety'. It's because they know they will mostly be held responsible and, from October and the introduction of Authorised Payment Protection rules, will almost always be held responsible.
I have a lot of sympathy with the banks for this one. Some years ago HSBC and Citibank, being the biggest global commercial banks, were asked to close down clients where they couldn't prove the source of their funds or end up with billions in fines and bankers in orange jump suits. So, they both planned to pull out of countries the Stans and large parts of Africa. Then they were told not to exit these countries. In the end, the authorities realised it was better that their own banks had some sight of the flows, rather than 'bad actors' filling the void.
I'd love to know the stats, as to whether all these rules have impacted money laundering. I understand the perception that it's just rules for the sheople that makes our lives harder but with no discernible affect on the wolves it is ostensibly aimed at.
The proliferation of Turkish barbers is a good example of organised crime blatantly operating under the noses of the law with apparently (until recently) no comment, let alone action.
A good friend of mine, and occasional visitor to the Valley, just retired as the global head of financial crime for HSBC and is writing a book. I'll see if I can get an objective view from him.
Agree with this. The banks must and do take positive action.
In the case of the example quoted by @prague that did sound to me more of a fraud check than an AML one but could have been.
Follow the NCA on social media and you will see real examples of bad actors getting caught including how AML measures brings them to light and why it’s important they are identified.
What’s the alternative though if it is considered a ‘charade’ ? That’s the reality you have to do something and I’m not clear what opponents would envisage otherwise
These are pretty competitive rates for 1, 2 and 3 year fixes, Richard. Highly respected financial institution as well - they have chunks of my cash on fixes.
Yes its going in an Investec one year, not least as I already have a chunk with them so I don’t have to go through the tiresome “know your customer” charade. But they only have a 7 day window and NS&I like to think about it before releas8ng your money, so I hadn’t set it up yet. Was nervously checking their rate in the last month. 5.15% is decent especially as it is replacing 3.9%. I expect this will be the last maturing bond where the replacement has a higher rate. Well of course it wasnt going to last but it looks like two full years of solid no-risk returns from cash. Just what us old gits need.
Why do you refer to it as a charade?
Having worked on the technical side of KYC systems, I can confirm it is a charade.
One example, peps and sanctions checks. 3 companies I have worked in all they do is a fuzzy search comparing first and last name against a list of politically exposed or sanctioned person. This is the extent of the check. If you match, some further evidence / checks required, if no match, carry on regardless. Bad news if your name is Vladimir Putin, ok for everyone else.
The checks are so basic (when being executed at volume) that they are laughable when compared to most modern technology. They should at least take other factors into account (DOB, residential address are two basic examples).
Not my experience working in financial services at all.
The checks are extensive and do include multiple factors.
What checks do you believe Investec or any similar company do with the info supplied to them by a new customer wishing to open a 1 year fixed cash bond? As I recall it included me having to use some creaky software to upload both sides of my driving licence.
My issue is that if I were some byznysman from Tashkent or somewhere similar requiring discreet personal banking services from some London based bank, I don't think i would be subjected to that, because the monthly fee I would be paying for this discretion (completely off the table for us normal citizens) would magically obviate the need for such trivia. Would it not?
The authoritative stories that London remains the banking location of choice for dodgy money despite all the rhetoric, and while ordinary citizens have to upload most of their regular utility bills just to open a current account, really piss me off.
Nonsense.
All UK regulated banks will do the required KYC. The fee you pay won’t change that.
Why is it a charade to provide proof of identity and verification?
Money laundering is very real and nasty individuals need to be stopped / prohibited. Of course people may have escaped detection but that’s not the point. Real criminals (not all) are able to be identified and caught.
If anything the bigger the client / the more money involved will heighten the due diligence performed.
For the more run of the mill retail customers it is relatively light touch to be aligned to the level of risk.
Of course. Nothing to see here Clearly it's all my fault for reading lefty rags like ..er.. the Economist
The article does not say the banks are the biggest problem (it's the law, both lawyers and credulous judges) but the banks are cited and quite obviously the due diligence is completely inadequate.
I'll give you another reason for my cynicism at a more mundane personal level. I'm with HSBC, have been since they were the Midland Bank. Admittedly now they have made their banking app work reasonably well, they have stopped the following charade, but up until about two years ago, if I moved a couple of chunks of money out of my current account, say 2x £10k, in one day, I could almost guarantee that my mobile would ring, and there was a bloke grandly announcing himself as from the fraud department. Then he would tell me we would need to go through some security ID questions which I thought a tad presumptuous, when he was calling me rather than the other way round. And then I would have to somehow assure him that yes, I made those transactions, and they are according to my wishes. And then I would say to myself, OK, it's a bit clumsy but they are doing it for my own good. Until one day after the umpteenth time, a thought occurred to me: They only ever call about an outgoing transaction. In nearly all cases the money had only recently come in - I don't keep 20k plus in a current account. Yet never, not once, did they call me to enquire about an incoming transaction. I suppose it would be a difficult call, because they'd have to ask a customer about the source of this money; but my point is, they could see this money coming in only recently so why should they be remotely surprised, let alone concerned, when it moves out again a few days or weeks later? That is also why I used the word "charade".
Sorry I don’t get your point. I work in this field so do know the subject matter.
Incoming payments are screened and could be held up or investigated if suspicious.
Don’t also forget the payment to you was also subject to that financial services institution applying checks and balances.
You paying the money away is checked for your own safety to ensure you are not being the victim of fraud.
Source of funds is queried from time to time and when triggers are breached and particularly on opening new accounts with an institution.
You earlier cited the KYC checks as a charade. I still can’t agree with that.
Interesting debate. Nick is quite right about the processes in place nowadays, although I would take issue that the bank is checking payments 'for your own safety'. It's because they know they will mostly be held responsible and, from October and the introduction of Authorised Payment Protection rules, will almost always be held responsible.
I have a lot of sympathy with the banks for this one. Some years ago HSBC and Citibank, being the biggest global commercial banks, were asked to close down clients where they couldn't prove the source of their funds or end up with billions in fines and bankers in orange jump suits. So, they both planned to pull out of countries the Stans and large parts of Africa. Then they were told not to exit these countries. In the end, the authorities realised it was better that their own banks had some sight of the flows, rather than 'bad actors' filling the void.
I'd love to know the stats, as to whether all these rules have impacted money laundering. I understand the perception that it's just rules for the sheople that makes our lives harder but with no discernible affect on the wolves it is ostensibly aimed at.
The proliferation of Turkish barbers is a good example of organised crime blatantly operating under the noses of the law with apparently (until recently) no comment, let alone action.
A good friend of mine, and occasional visitor to the Valley, just retired as the global head of financial crime for HSBC and is writing a book. I'll see if I can get an objective view from him.
Agree with this. The banks must and do take positive action.
In the case of the example quoted by @prague that did sound to me more of a fraud check than an AML one but could have been.
Follow the NCA on social media and you will see real examples of bad actors getting caught including how AML measures brings them to light and why it’s important they are identified.
What’s the alternative though if it is considered a ‘charade’ ? That’s the reality you have to do something and I’m not clear what opponents would envisage otherwise
Indeed. you have to do something. Here is what I'd suggest
*The next government makes it a policy to ensure that within, say, three years cases of fraud and money laundering are on a clear downward trend. This will involve sitting own and agreeing policy points with all the major stakeholders- I fully accept that banks are not the only or even the most important one
* Agree measurable targets which will demonstrate to voters that progress is being made. A qualitative goal is to ensure that the Economist cannot write an article with that headline again, and on the contrary writes how things are changing for the better
* Banks and similar need to demonstrate to their retail customers (aka voters) that their fraud and AML measures which a customer may encounter are administered with a light touch, with respect, and with maximum use of the information they already have at their disposal. What do I mean by this?As I said, the calls from HSBC have now stopped. I put this down them finally using their tech and customer info effectively. Going back to my previous experience, max 2 years ago, in transactions which the "fraud guy" said "the system had flagged", I was transferring money out of my current account to Charter Savings Bank. I had CSB in my list of saved payees on internet banking and had already sent money there. As I said, I had far too much cash in my current account. None of my personal details had changed and I knew that sometimes they take notice of personal details because once in a call which I initiated, the guy had stunned me in a pleasant way by thanking me for "being a customer for 26 years". Yet later I'm being hassled by the "fraud" people for these transactions when it is obvious to any experienced old-school clerk what I am doing. I recall that after I answered all his security questions I asked him how I could know for sure that he was genuine. That floored him a bit, I think his way to resolve that would have prolonged the process so I let it ride. But, sorry "Know your customer" ? Give me a break. I thought the main reason why it was "flagged" was that money was flowing out to an upstart competitor bank and they wanted to make that as difficult as possible. Cynical? Sure. That's what happens, in a communication vacuum. Cynicism, conspiracy theories, lotes of pissed off people.
Like I said, HSBC seem to have finally accepted that this was all too heavy handed and performative. All of them need to get there. One remaining issue is the daily limit on transactions which we have discussed here before. There may be good reasons for it, although why they would differ by bank needs explaining. We all deserve that explanation. We are customers. And I remain of the belief that some customers are more equal than others in this respect, and that Mr Ruslan Loadzawedze of Tashkent is not subjected to those arbitrary limits on his personal account.
These are pretty competitive rates for 1, 2 and 3 year fixes, Richard. Highly respected financial institution as well - they have chunks of my cash on fixes.
Yes its going in an Investec one year, not least as I already have a chunk with them so I don’t have to go through the tiresome “know your customer” charade. But they only have a 7 day window and NS&I like to think about it before releas8ng your money, so I hadn’t set it up yet. Was nervously checking their rate in the last month. 5.15% is decent especially as it is replacing 3.9%. I expect this will be the last maturing bond where the replacement has a higher rate. Well of course it wasnt going to last but it looks like two full years of solid no-risk returns from cash. Just what us old gits need.
Why do you refer to it as a charade?
Having worked on the technical side of KYC systems, I can confirm it is a charade.
One example, peps and sanctions checks. 3 companies I have worked in all they do is a fuzzy search comparing first and last name against a list of politically exposed or sanctioned person. This is the extent of the check. If you match, some further evidence / checks required, if no match, carry on regardless. Bad news if your name is Vladimir Putin, ok for everyone else.
The checks are so basic (when being executed at volume) that they are laughable when compared to most modern technology. They should at least take other factors into account (DOB, residential address are two basic examples).
Not my experience working in financial services at all.
The checks are extensive and do include multiple factors.
What checks do you believe Investec or any similar company do with the info supplied to them by a new customer wishing to open a 1 year fixed cash bond? As I recall it included me having to use some creaky software to upload both sides of my driving licence.
My issue is that if I were some byznysman from Tashkent or somewhere similar requiring discreet personal banking services from some London based bank, I don't think i would be subjected to that, because the monthly fee I would be paying for this discretion (completely off the table for us normal citizens) would magically obviate the need for such trivia. Would it not?
The authoritative stories that London remains the banking location of choice for dodgy money despite all the rhetoric, and while ordinary citizens have to upload most of their regular utility bills just to open a current account, really piss me off.
Nonsense.
All UK regulated banks will do the required KYC. The fee you pay won’t change that.
Why is it a charade to provide proof of identity and verification?
Money laundering is very real and nasty individuals need to be stopped / prohibited. Of course people may have escaped detection but that’s not the point. Real criminals (not all) are able to be identified and caught.
If anything the bigger the client / the more money involved will heighten the due diligence performed.
For the more run of the mill retail customers it is relatively light touch to be aligned to the level of risk.
Of course. Nothing to see here Clearly it's all my fault for reading lefty rags like ..er.. the Economist
The article does not say the banks are the biggest problem (it's the law, both lawyers and credulous judges) but the banks are cited and quite obviously the due diligence is completely inadequate.
I'll give you another reason for my cynicism at a more mundane personal level. I'm with HSBC, have been since they were the Midland Bank. Admittedly now they have made their banking app work reasonably well, they have stopped the following charade, but up until about two years ago, if I moved a couple of chunks of money out of my current account, say 2x £10k, in one day, I could almost guarantee that my mobile would ring, and there was a bloke grandly announcing himself as from the fraud department. Then he would tell me we would need to go through some security ID questions which I thought a tad presumptuous, when he was calling me rather than the other way round. And then I would have to somehow assure him that yes, I made those transactions, and they are according to my wishes. And then I would say to myself, OK, it's a bit clumsy but they are doing it for my own good. Until one day after the umpteenth time, a thought occurred to me: They only ever call about an outgoing transaction. In nearly all cases the money had only recently come in - I don't keep 20k plus in a current account. Yet never, not once, did they call me to enquire about an incoming transaction. I suppose it would be a difficult call, because they'd have to ask a customer about the source of this money; but my point is, they could see this money coming in only recently so why should they be remotely surprised, let alone concerned, when it moves out again a few days or weeks later? That is also why I used the word "charade".
Sorry I don’t get your point. I work in this field so do know the subject matter.
Incoming payments are screened and could be held up or investigated if suspicious.
Don’t also forget the payment to you was also subject to that financial services institution applying checks and balances.
You paying the money away is checked for your own safety to ensure you are not being the victim of fraud.
Source of funds is queried from time to time and when triggers are breached and particularly on opening new accounts with an institution.
You earlier cited the KYC checks as a charade. I still can’t agree with that.
Interesting debate. Nick is quite right about the processes in place nowadays, although I would take issue that the bank is checking payments 'for your own safety'. It's because they know they will mostly be held responsible and, from October and the introduction of Authorised Payment Protection rules, will almost always be held responsible.
I have a lot of sympathy with the banks for this one. Some years ago HSBC and Citibank, being the biggest global commercial banks, were asked to close down clients where they couldn't prove the source of their funds or end up with billions in fines and bankers in orange jump suits. So, they both planned to pull out of countries the Stans and large parts of Africa. Then they were told not to exit these countries. In the end, the authorities realised it was better that their own banks had some sight of the flows, rather than 'bad actors' filling the void.
I'd love to know the stats, as to whether all these rules have impacted money laundering. I understand the perception that it's just rules for the sheople that makes our lives harder but with no discernible affect on the wolves it is ostensibly aimed at.
The proliferation of Turkish barbers is a good example of organised crime blatantly operating under the noses of the law with apparently (until recently) no comment, let alone action.
A good friend of mine, and occasional visitor to the Valley, just retired as the global head of financial crime for HSBC and is writing a book. I'll see if I can get an objective view from him.
Agree with this. The banks must and do take positive action.
In the case of the example quoted by @prague that did sound to me more of a fraud check than an AML one but could have been.
Follow the NCA on social media and you will see real examples of bad actors getting caught including how AML measures brings them to light and why it’s important they are identified.
What’s the alternative though if it is considered a ‘charade’ ? That’s the reality you have to do something and I’m not clear what opponents would envisage otherwise
Indeed. you have to do something. Here is what I'd suggest
*The next government makes it a policy to ensure that within, say, three years cases of fraud and money laundering are on a clear downward trend. This will involve sitting own and agreeing policy points with all the major stakeholders- I fully accept that banks are not the only or even the most important one
* Agree measurable targets which will demonstrate to voters that progress is being made. A qualitative goal is to ensure that the Economist cannot write an article with that headline again, and on the contrary writes how things are changing for the better
* Banks and similar need to demonstrate to their retail customers (aka voters) that their fraud and AML measures which a customer may encounter are administered with a light touch, with respect, and with maximum use of the information they already have at their disposal. What do I mean by this?As I said, the calls from HSBC have now stopped. I put this down them finally using their tech and customer info effectively. Going back to my previous experience, max 2 years ago, in transactions which the "fraud guy" said "the system had flagged", I was transferring money out of my current account to Charter Savings Bank. I had CSB in my list of saved payees on internet banking and had already sent money there. As I said, I had far too much cash in my current account. None of my personal details had changed and I knew that sometimes they take notice of personal details because once in a call which I initiated, the guy had stunned me in a pleasant way by thanking me for "being a customer for 26 years". Yet later I'm being hassled by the "fraud" people for these transactions when it is obvious to any experienced old-school clerk what I am doing. I recall that after I answered all his security questions I asked him how I could know for sure that he was genuine. That floored him a bit, I think his way to resolve that would have prolonged the process so I let it ride. But, sorry "Know your customer" ? Give me a break. I thought the main reason why it was "flagged" was that money was flowing out to an upstart competitor bank and they wanted to make that as difficult as possible. Cynical? Sure. That's what happens, in a communication vacuum. Cynicism, conspiracy theories, lotes of pissed off people.
Like I said, HSBC seem to have finally accepted that this was all too heavy handed and performative. All of them need to get there. One remaining issue is the daily limit on transactions which we have discussed here before. There may be good reasons for it, although why they would differ by bank needs explaining. We all deserve that explanation. We are customers. And I remain of the belief that some customers are more equal than others in this respect, and that Mr Ruslan Loadzawedze of Tashkent is not subjected to those arbitrary limits on his personal account.
I can assure you it does not flag because the money is going to a competitor. That’s just incorrect.
KYC is already light touch for retail customers and quickly navigated - it really is.
You are right that systems improve and may learn and hence why some payments are no longer triggered.
But to your general point ‘policy points’ is very vague. What sort of thing do you envisage?
As to measures I can agree with this but too simplistic to say downward trend. Sometimes systems and processes need to improve to capture / identify more cases before a trend of prevention can be evidenced. Banks tend not to publish fraud figures- I assume because of maintaining customer confidence if the numbers are misunderstood / badly interpreted and to protect against those who commit the crimes.
The vast majority of payments transact in seconds without customer inconvenience whilst still trying to identify the ‘bad actors’.
Transaction limits rarely trouble most customers on most occasions and workarounds exist when it does. They are genuinely there to safeguard against fraud in most instances or protect customers from their own errors as it’s harder to retrieve money once sent.
I've just noticed that my current workplace pension with Scottish Widows allows you to choose the % you invest per month towards each fund. I have 2 funds at the moment which are split 50/50. I've noticed that to keep this balance, there is often a selling of a small number of units each month.
Does anybody in the trade know whether this could stack up in terms of transaction costs? Is there a benefit of just investing solely in One fund rather than a selection of 2? Obviously these are generally funds of funds, so opportunity for growth and risk is spread.
In terms of AML checks, I will reference again my experience managing projects to implement systems to support these obligations
1. The data is so poorly managed in even the smallest of banks, there is next to no chance of connecting the dots so that, for example, credit speaks to retail speaks to investment. Different companies have different scales of problems and financial institutions implementing a proper data strategy would go a long way to improving the customer experience across a financial institution.
2. Banks want to spend as little as possible on making the customer experience of AML checks customer friendly and less of a charade. In my experience, decisions makers only listen if you outline the lost business from processes that encounter friction for the customer, and only then if you get the right people in the room. There are a number of companies globally who are doing great things in user identification and improving the journey. This is an example of making the process 'easier' for identification by Lloyds: https://nationaltechnology.co.uk/Lloyds_Bank_Uses_NFC_Tech_To_Launch_In_App_Passport_Scanning.php
Of course, both the above are true of lots of business processes beyond AML processes in banks, but my point is, until some banks move away from manual processing of AML checks (which many still do) and embrace technology and a data strategy, it is still a pain for bog standard customers to get through these checks.
I've just noticed that my current workplace pension with Scottish Widows allows you to choose the % you invest per month towards each fund. I have 2 funds at the moment which are split 50/50. I've noticed that to keep this balance, there is often a selling of a small number of units each month.
Does anybody in the trade know whether this could stack up in terms of transaction costs? Is there a benefit of just investing solely in One fund rather than a selection of 2? Obviously these are generally funds of funds, so opportunity for growth and risk is spread.
That seems odd, it sounds as if they are regularly rebalancing the funds regulalry. You'd need to check what charges SW levy for sales/buys, but I'd put a stop to it if you can.
I've just noticed that my current workplace pension with Scottish Widows allows you to choose the % you invest per month towards each fund. I have 2 funds at the moment which are split 50/50. I've noticed that to keep this balance, there is often a selling of a small number of units each month.
Does anybody in the trade know whether this could stack up in terms of transaction costs? Is there a benefit of just investing solely in One fund rather than a selection of 2? Obviously these are generally funds of funds, so opportunity for growth and risk is spread.
The selling of a small % is probably just their charges taken on a monthly basis. That could be just SW charges for running the plan (anything between 0.25%-1%) and/or any ongoing adviser fees that might be payable if it's a small Group pension.
Shouldnt make a difference if you are in 1 fund or 2, but might make a difference if the individual fund charges are massively different. Just depends what funds you are in, but sounds like a managed/portfolio fund.
Cash ISA question. Having invested part of £20k with one institution, do I have to put any top up with that institution? I know this used to be the rule but have a feeling it was changed. Is that correct?
Letting it ride for the moment but the US looks a bit frothy now. Finger is moving nearer to the sell button.
My thoughts entirely, I keep rebalancing the US down and then it grows again!
Just sold my little Nvidia holding on the back of wise advice to leave a bit of profit for the next bloke. Might buy back on any dip, but I've had a good run with it so happy. Probably should do likewise with AMD but couldnt bring myself to press the button this evening.
Letting it ride for the moment but the US looks a bit frothy now. Finger is moving nearer to the sell button.
My thoughts entirely, I keep rebalancing the US down and then it grows again!
Just sold my little Nvidia holding on the back of wise advice to leave a bit of profit for the next bloke. Might buy back on any dip, but I've had a good run with it so happy. Probably should do likewise with AMD but couldnt bring myself to press the button this evening.
Profit for the next bloke. Not heard that one before!
I guess it can come under savings, but a nice little NI reduction in the budget.
Does nothing for the low paid (earning less than £12,570) as they don't pay it or for those over retirement age who are still working (quite a few now) who also don't pay it. And obviously does nothing for those who have retired. By freezing personal allowances more and more people are now into the higher rate bracket. If he wanted the "grey vote" he should have reduced basic rate income tax by 2p or changed the personal allowances. It was all about trying to fool people into thinking they would actually be better off...
I guess it can come under savings, but a nice little NI reduction in the budget.
Does nothing for the low paid (earning less than £12,570) as they don't pay it or for those over retirement age who are still working (quite a few now) who also don't pay it. And obviously does nothing for those who have retired. By freezing personal allowances more and more people are now into the higher rate bracket. If he wanted the "grey vote" he should have reduced basic rate income tax by 2p or changed the personal allowances. It was all about trying to fool people into thinking they would actually be better off...
I guess it can come under savings, but a nice little NI reduction in the budget.
Does nothing for the low paid (earning less than £12,570) as they don't pay it or for those over retirement age who are still working (quite a few now) who also don't pay it. And obviously does nothing for those who have retired. By freezing personal allowances more and more people are now into the higher rate bracket. If he wanted the "grey vote" he should have reduced basic rate income tax by 2p or changed the personal allowances. It was all about trying to fool people into thinking they would actually be better off...
As an adviser who works with pensions tax relief etc I welcome sticking with 20% & 40% - much easier to calculate amounts going in.
Increasing the personal allowance would be my favoured route to cut tax. I'm sure Boris, when PM, said that his aim was to get the PA for the starting rate of tax to be £15k by the end of this Parliament.
Fiscal drag has brought a lot more people into paying both the basic rate & the higher rate. You once had to be a "high earner" to be paying the top rate of tax (I know there is a 45% rate but you get the gist). £50k pa is hardly top earner status anymore.
I guess it can come under savings, but a nice little NI reduction in the budget.
Does nothing for the low paid (earning less than £12,570) as they don't pay it or for those over retirement age who are still working (quite a few now) who also don't pay it. And obviously does nothing for those who have retired. By freezing personal allowances more and more people are now into the higher rate bracket. If he wanted the "grey vote" he should have reduced basic rate income tax by 2p or changed the personal allowances. It was all about trying to fool people into thinking they would actually be better off...
Agree with most of that, I also think it was to do with the triple lock and was not to appeal to the grey vote, needed a way to appeal to the non state pensioners.
I guess it can come under savings, but a nice little NI reduction in the budget.
Does nothing for the low paid (earning less than £12,570) as they don't pay it or for those over retirement age who are still working (quite a few now) who also don't pay it. And obviously does nothing for those who have retired. By freezing personal allowances more and more people are now into the higher rate bracket. If he wanted the "grey vote" he should have reduced basic rate income tax by 2p or changed the personal allowances. It was all about trying to fool people into thinking they would actually be better off...
Agree with most of that, I also think it was to do with the triple lock and was not to appeal to the grey vote, needed a way to appeal to the non state pensioners.
Suggestion from some is there will be another ‘fiscal’ event in the Autumn when the tax cuts will be greater and then call the election.
It's only during budget announcements that I hear 'P' used rather than 'Percent'. Is there any reason for this? Am I missing something.
The "P" is pence, so I expect its because they think it will resonant more with the general public as it is in ££££ rather than %%%%. They think the "man in the street" will understand it more as its in monetary terms rather than a "mathematical" figure.
I just don't understand its use. Something that was never taught in my economics degree (many years back, mind).
"Hunt announced a widely-trailed 2p cut in National Insurance (NI), reducing the rate paid by employees from 10% to 8%, and from 8% to 6% for the self-employed."
I just don't understand its use. Something that was never taught in my economics degree (many years back, mind).
"Hunt announced a widely-trailed 2p IN THE POUND cut in National Insurance (NI), reducing the rate paid by employees from 10% to 8%, and from 8% to 6% for the self-employed."
I've deferred my state pension by a year but looking at the figures it's not the best thing to do. I did it to avoid paying a higher rate of tax.
I'm considering taking the pension but having the amount of the pension each month paid from my salary as an avc to my work pension. That way I can increase the lump sum and take 25% as a lump sum tax free when I retire. I will also get the 20% Government top up and tax relief on the rest when I complete my tax return.
That is my understanding but I may be missing something. Thoughts?
NB I probably can't use my main personal pension fund as it's offshore as a QROPS.
I've deferred my state pension by a year but looking at the figures it's not the best thing to do. I did it to avoid paying a higher rate of tax.
I'm considering taking the pension but having the amount of the pension each month paid from my salary as an avc to my work pension. That way I can increase the lump sum and take 25% as a lump sum tax free when I retire. I will also get the 20% Government top up and tax relief on the rest when I complete my tax return.
That is my understanding but I may be missing something. Thoughts?
NB I probably can't use my main personal pension fund as it's offshore as a QROPS.
Not sure I understand you.
So you are thinking about taking the State Pension and then paying a similar amount from your earned income (?) into your works pension (not sure why it's an AVC ?) - Yes ??
If so.....
Then conceivably I dont see a problem. Would depend on the type of pension your employer runs. Shouldn't fall foul of the recycling rules but cant say I've ever come across someone doing that. You must be 66/67.....when do you anticipate retiring fully?
Might be best to just stick the State Pension income into an ISA. Wont get the tax relief going in but wont be taxed coming out.
Rubbish on the premium bonds but I opened a little regular savings account with Nationwide, 5.5% for two years if you pay in no more than £50 a month. Peanuts really, but they're my bank anyway, with the added gimmick of a draw every six months to win £250. I always disregard this kind of thing. Well, email on Wednesday telling me I am one of 4,311 winners, and the money was already in the account. Nice!
Letting it ride for the moment but the US looks a bit frothy now. Finger is moving nearer to the sell button.
My thoughts entirely, I keep rebalancing the US down and then it grows again!
Just sold my little Nvidia holding on the back of wise advice to leave a bit of profit for the next bloke. Might buy back on any dip, but I've had a good run with it so happy. Probably should do likewise with AMD but couldnt bring myself to press the button this evening.
Profit for the next bloke. Not heard that one before!
It's akin to the quote about making sure your players legs go on another managers pitch.
I've deferred my state pension by a year but looking at the figures it's not the best thing to do. I did it to avoid paying a higher rate of tax.
I'm considering taking the pension but having the amount of the pension each month paid from my salary as an avc to my work pension. That way I can increase the lump sum and take 25% as a lump sum tax free when I retire. I will also get the 20% Government top up and tax relief on the rest when I complete my tax return.
That is my understanding but I may be missing something. Thoughts?
NB I probably can't use my main personal pension fund as it's offshore as a QROPS.
As your payment to works pension would be an AVC rather than just an increase in contribution, I assume your pension is some kind of final salary scheme.
This what I did I payed in a significant AVC pot. I then took all this as my 25% tax free cash. It massively reduced the amount of pension I commuted to get my cash maximum.
I'm probably using the wrong terminology regarding the contributions.
Golfie, you're right, I'm in the first year after retirement age and want to get his sorted early into the next tax year. Not sure when I will actually retire; I had 18 years in Thailand so I'm not bored with the day job yet!
I'll speak to the company pensions people and see what they suggest.
Comments
or investigated if suspicious.
I have a lot of sympathy with the banks for this one. Some years ago HSBC and Citibank, being the biggest global commercial banks, were asked to close down clients where they couldn't prove the source of their funds or end up with billions in fines and bankers in orange jump suits. So, they both planned to pull out of countries the Stans and large parts of Africa. Then they were told not to exit these countries. In the end, the authorities realised it was better that their own banks had some sight of the flows, rather than 'bad actors' filling the void.
I'd love to know the stats, as to whether all these rules have impacted money laundering. I understand the perception that it's just rules for the sheople that makes our lives harder but with no discernible affect on the wolves it is ostensibly aimed at.
The proliferation of Turkish barbers is a good example of organised crime blatantly operating under the noses of the law with apparently (until recently) no comment, let alone action.
A good friend of mine, and occasional visitor to the Valley, just retired as the global head of financial crime for HSBC and is writing a book. I'll see if I can get an objective view from him.
*The next government makes it a policy to ensure that within, say, three years cases of fraud and money laundering are on a clear downward trend. This will involve sitting own and agreeing policy points with all the major stakeholders- I fully accept that banks are not the only or even the most important one
* Agree measurable targets which will demonstrate to voters that progress is being made. A qualitative goal is to ensure that the Economist cannot write an article with that headline again, and on the contrary writes how things are changing for the better
* Banks and similar need to demonstrate to their retail customers (aka voters) that their fraud and AML measures which a customer may encounter are administered with a light touch, with respect, and with maximum use of the information they already have at their disposal. What do I mean by this?As I said, the calls from HSBC have now stopped. I put this down them finally using their tech and customer info effectively. Going back to my previous experience, max 2 years ago, in transactions which the "fraud guy" said "the system had flagged", I was transferring money out of my current account to Charter Savings Bank. I had CSB in my list of saved payees on internet banking and had already sent money there. As I said, I had far too much cash in my current account. None of my personal details had changed and I knew that sometimes they take notice of personal details because once in a call which I initiated, the guy had stunned me in a pleasant way by thanking me for "being a customer for 26 years". Yet later I'm being hassled by the "fraud" people for these transactions when it is obvious to any experienced old-school clerk what I am doing. I recall that after I answered all his security questions I asked him how I could know for sure that he was genuine. That floored him a bit, I think his way to resolve that would have prolonged the process so I let it ride. But, sorry "Know your customer" ? Give me a break. I thought the main reason why it was "flagged" was that money was flowing out to an upstart competitor bank and they wanted to make that as difficult as possible. Cynical? Sure. That's what happens, in a communication vacuum. Cynicism, conspiracy theories, lotes of pissed off people.
Like I said, HSBC seem to have finally accepted that this was all too heavy handed and performative. All of them need to get there. One remaining issue is the daily limit on transactions which we have discussed here before. There may be good reasons for it, although why they would differ by bank needs explaining. We all deserve that explanation. We are customers. And I remain of the belief that some customers are more equal than others in this respect, and that Mr Ruslan Loadzawedze of Tashkent is not subjected to those arbitrary limits on his personal account.
As to measures I can agree with this but too simplistic to say downward trend. Sometimes systems and processes need to improve to capture / identify more cases before a trend of prevention can be evidenced. Banks tend not to publish fraud figures- I assume because of maintaining customer confidence if the numbers are misunderstood / badly interpreted and to protect against those who commit the crimes.
Does anybody in the trade know whether this could stack up in terms of transaction costs? Is there a benefit of just investing solely in One fund rather than a selection of 2? Obviously these are generally funds of funds, so opportunity for growth and risk is spread.
1. The data is so poorly managed in even the smallest of banks, there is next to no chance of connecting the dots so that, for example, credit speaks to retail speaks to investment. Different companies have different scales of problems and financial institutions implementing a proper data strategy would go a long way to improving the customer experience across a financial institution.
2. Banks want to spend as little as possible on making the customer experience of AML checks customer friendly and less of a charade. In my experience, decisions makers only listen if you outline the lost business from processes that encounter friction for the customer, and only then if you get the right people in the room. There are a number of companies globally who are doing great things in user identification and improving the journey. This is an example of making the process 'easier' for identification by Lloyds: https://nationaltechnology.co.uk/Lloyds_Bank_Uses_NFC_Tech_To_Launch_In_App_Passport_Scanning.php
Of course, both the above are true of lots of business processes beyond AML processes in banks, but my point is, until some banks move away from manual processing of AML checks (which many still do) and embrace technology and a data strategy, it is still a pain for bog standard customers to get through these checks.
Shouldnt make a difference if you are in 1 fund or 2, but might make a difference if the individual fund charges are massively different. Just depends what funds you are in, but sounds like a managed/portfolio fund.
I know this used to be the rule but have a feeling it was changed. Is that correct?
if you have found a better product why not transfer your existing isa when you open the new account
Increasing the personal allowance would be my favoured route to cut tax. I'm sure Boris, when PM, said that his aim was to get the PA for the starting rate of tax to be £15k by the end of this Parliament.
Fiscal drag has brought a lot more people into paying both the basic rate & the higher rate. You once had to be a "high earner" to be paying the top rate of tax (I know there is a 45% rate but you get the gist). £50k pa is hardly top earner status anymore.
"Hunt announced a widely-trailed 2p cut in National Insurance (NI), reducing the rate paid by employees from 10% to 8%, and from 8% to 6% for the self-employed."
I've deferred my state pension by a year but looking at the figures it's not the best thing to do. I did it to avoid paying a higher rate of tax.
I'm considering taking the pension but having the amount of the pension each month paid from my salary as an avc to my work pension. That way I can increase the lump sum and take 25% as a lump sum tax free when I retire. I will also get the 20% Government top up and tax relief on the rest when I complete my tax return.
That is my understanding but I may be missing something. Thoughts?
NB I probably can't use my main personal pension fund as it's offshore as a QROPS.
So you are thinking about taking the State Pension and then paying a similar amount from your earned income (?) into your works pension (not sure why it's an AVC ?) - Yes ??
If so.....
Then conceivably I dont see a problem. Would depend on the type of pension your employer runs. Shouldn't fall foul of the recycling rules but cant say I've ever come across someone doing that. You must be 66/67.....when do you anticipate retiring fully?
Might be best to just stick the State Pension income into an ISA. Wont get the tax relief going in but wont be taxed coming out.
It's akin to the quote about making sure your players legs go on another managers pitch.
This what I did I payed in a significant AVC pot. I then took all this as my 25% tax free cash. It massively reduced the amount of pension I commuted to get my cash maximum.
Golfie, you're right, I'm in the first year after retirement age and want to get his sorted early into the next tax year. Not sure when I will actually retire; I had 18 years in Thailand so I'm not bored with the day job yet!
I'll speak to the company pensions people and see what they suggest.