The front line people dealing with safe deposit boxes must receive specialized training in order to be able to spot suspicious behavior and report it in due time (before an AML control on this activity). In this situation, more than in the case of current accounts, the front line people represent the bank’s most essential resource in identifying and reporting suspicious activity in due time. In the case of safe deposit boxes, “suspicious” is first of all behavioral and behavior cannot be included in AML scenarios How do you spot suspicious indicia in safe deposit boxes? I thus used all the available databases that I could consult without the customer’s prior consent (the national registry of companies to see if the customer has companies, the ministry of finance website to see the financial situation of his companies, court decisions or trials involving the customer or his companies, google for extra information, facebook, linkedin, etc.). In the absence of a transactional profile I realized that I was forced to base much of my analysis on external information in order to understand the customer, his current activity, his reasons for having a safe deposit box (and of a particular size) and especially his method of using the safe deposit box (number of visits in a certain period, time spent, etc.). I found myself in the situation of analyzing customers with safe deposit boxes that had no activity on their current accounts. In this case, you will have no transactional profile that could give you hints and AML alerts about possible misuse of the safe deposit box. Otherwise, you will find yourself in the situation where customers open bank accounts just to benefit of the safe deposit box but do not use their current accounts. They must be offered to customers that already have a transactional history with the bank. It is not sufficient that the bank procedures state that safe deposit boxes are only granted to bank customers. You must have a customer transactional profile that you can correlate with the safe deposit box behavior. If you cannot see in the safe deposit box and monitor it, then you must allow yourself the luxury to have a current account used by the customer in which you can look and which you can analyze. Safe deposit boxes should be offered only to existing customers, that already have a history with the bank However, safe deposit boxes are subject to the same AML / CFT / Sanctions regulations as current accounts which in turn are visible to the bank and subject to its transactions monitoring system. You cannot see what the customer is keeping in it or what goes in and out as in the case of current accounts. The safe deposit box is an opaque service I will share with you my conclusions on safe-deposit boxes hoping that you will enlarge them with your own personal experience, considering that there is relatively little documentation on this subject. What is the definition of “suspicious” when the bank is 80% blind and where the AML scenarios from the monitoring systems do not apply anymore? How can we spot and report suspicious in such cases? How can you monitor this activity and what mitigations measures can you implement? If you think that it can be quite difficult to spot suspicious transactions/behaviors in customers’ bank accounts, let’s think how it is to spot them in a financial service where you don’t even see what the customer is doing.
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