Banks know many things about their customers.

They know these things for three reasons. The first is that they have to, writes Steve Goldstein. There are many regulations that require a bank to know its customers, primarily to prevent money-laundering and combat the financing of terrorism.

The second reason is to assess risk. Banks need to know about their customers to determine whether the product the customer needs from the bank is suitable and if the return outweighs the risk.

The final reason is that they want to: the information banks collect about their customers helps them cross-sell different products to the same customer.

At the time of onboarding, different types of customers need to provide banks with different types of information. A residential mortgage applicant, for example, will need to provide information about the property they’re buying and a significant amount of personal financial information. The bank will run consumer credit checks and perhaps civil and criminal record checks. This happens thousands of times a day. Read more…