Comments on: Compliance costs – who benefits?

By: ozrisk

ozrisk — Fri, 01 Dec 2006 03:15:12 +0000

Colin,
In response to your first paragraph I would say I agree and add (overstating a little bit) “…but the road to hell is paved with good intentions.”
On the second I would again agree, particularly wrt the AML / CTF position. The automated data mining capacity needed for a large bank to comply with this should yield priceless information about the customers, you just have to ask it. The same pattern recognition algorithms that pick up suspicious changes could also pick up marketing opportunities. Done correctly, this should allow for much better targeting of marketing spend to customers that actually need it.
Most of them will waste it, however, seeing this as just another compliance project. A real shame.

By: Colin

Colin — Fri, 01 Dec 2006 02:38:45 +0000

The general sense in North America(n) banks is that the rules went too far. In Canada there a whole new set of beaurocrats seemingly inventing new rules as they go along. Having said that, most have the correct inspiration, that is to protect consumers, and we all too easily forget the bank crashes in the 80′s.

The other comment I would make is that Banks generally (there are key smart exceptions) treat the rules as rules, rather than opportunities to lever for added value. I look at the Wells Fargo “Spending Report” which is clearly leading edge. But I would speculate that the genesis of the source data used in that report might well have been required for anti terrorism financing reporting, so why not collect the data, and generate customer benefit as well.