Know your customer and anti-money laundering measures

... min read

Keeping ING safe, secure and compliant continues to be a top priority. It’s part of who we are: integrity is at the heart of our Orange Code – the ING values and behaviours. As a gatekeeper to the financial system, we have an important role in the collective fight against financial and economic crimes. By performing customer due diligence and monitoring transactions we aim to detect and prevent the financial system from being misused in criminal activities, including money laundering and terrorist financing, for the safety and security of our customers and society.

These crimes are universal and affect all of society. Stopping them is not something one bank can do alone. It’s a challenge for our entire industry. That’s why we work with other banks, law enforcement and public and private parties to identify and combat threats. Effectiveness is improved by shared intelligence, collaboration and third-party partnerships.

Know your customer

Know your customer (KYC) is the first step towards a safe and compliant bank. It ensures we only do business with people and companies we have verified as being trustworthy. This includes carrying out customer due diligence checks, updating customer files, screening customers and transactions, monitoring transactions and reporting suspicious activities.

We also carry out environmental and social assessments. These help us make transparent choices about who and what we finance, to limit the impact of our business activities on communities and the environment.

ING has around 4,000 people working on KYC related activities globally.

With activities in over 40 countries and 38 million customers, this is a sizeable operation that encompasses all customer segments in all ING business units.

How we improve our compliance and customer due diligence

Since 2017, ING has been working to improve and enhance compliance risk management. These efforts were stepped up in 2018 following ING’s settlement with the Dutch authorities after an investigation found serious shortcomings in the execution of customer due diligence and transaction monitoring requirements. ING is also working with Banca d’Italia to address shortcomings in AML processes in Italy.

KYC Enhancement Programme

We are continuously working to strengthen our execution of KYC and build a more sustainable KYC practice. One of the ways is through the global KYC Enhancement Programme which consists of the following:

Enhancing customer due diligence files (documentation, data and identity verification), performing transaction monitoring look-back activities on past transactions, and reporting on unusual activities should they be identified.
Making structural improvements in five areas: policy and risk appetite statements, digital tooling, monitoring and screening, governance, and KYC knowledge and behaviour.

Know Your Customer Enhancement Programme

KYC milestones

Policies

Updated KYC policy incorporating all existing policies relating to AML/FEC/ customer due diligence
Updated the environmental and social risk (ESR) framework
Implemented a systematic integrated risk approach (SIRA) and risk appetite statements (RAS) in all business lines globally

Governance

Continued to build global KYC organisation to develop consistent processes, work instructions, roles and responsibilities
Established KYC Committees to manage and steer all KYC activities in the countries/regions and business lines
Installed Client Integrity Risk Committees to steer decisions on client relationships based on compliance criteria
Developed SparQ, a global platform that uses AI to automate the process of turning regulation into policy

Tooling

Developed new customer due diligence case management modules for mid-corporate customers in Poland and private banking clients in Luxembourg. Roll out in other countries to follow
In the Netherlands, a transaction analysis pre-processing tool (TAPT) digitalises transaction data of SME customers for analysis, automating this file enhancement process
Target continuous adverse media screening tool rolled out in most locations
ING innovations to automate and improve KYC include an anti-smurfing tool, virtual alert handler and anomaly detection tool

Monitoring

Introduced new standard transaction monitoring tooling, supported by risk-based scenarios with follow-up in terms of handling alerts and reporting suspicious activities
Continuous name screening introduced in several countries and will be expanded throughout ING
Global customer activity monitoring (CAM) control guidance came into effect outlining a uniform CAM methodology framework
To harmonise the fight against financial crime ING works with the Dutch Banking Association, Dutch central bank and public-private partners on preventative action to identify and combat FEC threats
ING is working with other banks in the Netherlands and with other banks and payment providers in Belgium to monitor payment transactions. The combined transaction database further enhances monitoring and alert detection
Increased focus on KYC led to more accounts being closed, including those of customers who did not respond to requests for information
Set up a Covid-19 taskforce within ING to monitor transactions in a structured and centralised way to protect customers from fraud and further strengthen cybersecurity, during the corona virus pandemic
New cases of unusual transactions reported to the relevant authorities by our Covid-19 taskforce as a result of analysing new behavioural patterns of customers
Our global pre-transaction screening system ensures a consistent approach to how we monitor customers and transactions

Knowledge and behaviour

Global KYC Academy set up to professionalise training. Working with ACAMS (Association of Certified Anti-Money Laundering Specialists)
New all-staff learning module to raise KYC awareness in 2020. Also trainings on cybersecurity, sanctions and anti-competitive conduct
In 2020, ING launched a new global Code of Conduct that builds on the ING values and behaviours in our Orange Code, which puts integrity above all
KYC remains a key topic for senior management at the annual ING International Conference
Behavioural risk assessments are carried out within the KYC value chain to identify high-risk behaviours and their drivers and give direction to interventions if needed. Since 2018, several KYC teams in various business lines in the Netherlands, US, Philippines, Belgium and Germany have been assessed
Initiated leadership labs, workshops with senior leaders, to address high-risk behavioural patterns identified in the assessments and develop the right conditions to mitigate risks.
Held employee ‘nudge’ labs to identify small behavioural changes that can positively improve KYC execution
Piloted a campaign to raise awareness among customers of trade-based money laundering