Thursday 21 July 2016

1MDB - what more to say... a key lesson for financial institutions

Apart from the fact that the publications in the Sarawak Report http://www.sarawakreport.org/2016/07/caught-red-handed-by-the-fbi-pm-najib-razak-malaysian-official-number-1-is-fingered-by-the-doj/ will likely have a political impact there's a few more observations that we can make.

First and foremost: FIs need to do their homework and ensure that they know their clients, the case once more proves the risks of dealing with PEPs loud and clear.

Secondly: where smoke is, is fire... In other words: a CDD analyst needs to develop some 'fingerspitzengefuhl', a 6th sense to 'smell' if a client can be trusted and accepted as a client or not.

Both imply that every FI should have a working (! that means not just on paper...) risk based approach to onboard new clients and assess existing clients. Moreover, CDD, Customer Due Diligence, analysis can be taught, but knowledge alone doesn't make a good analyst. An inquisitive mind and an attitude to truly help the FI to understand its clients are crucial.


No comments:

Post a Comment