Banks typically reject 6-15 percent of would-be clients: survey
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ZURICH (Reuters) - Banks wary of doing business with potentially troublesome clients typically turn away between 6 and 15 percent of people seeking to become customers, a survey released on Tuesday found.
The study by LexisNexis Risk Solutions of banks in eight financial centers found 14 percent of banks turned away 5 percent or less of individuals due to current know-your-customer (KYC) or credit risk decision processes.
Only 5 percent showed the door to more than 25 percent of potential clients.
Banks in Brazil tended to turn away the most people, according to the survey, which covered nearly 300 banks in the United States, Britain, Germany, Brazil, Mexico, China, Hong Kong and Singapore.
Faced with the risk of legal and financial penalties from regulators, and the possibility of damage to their reputation, many banks are beefing up safeguards to prevent clients from using their services to launder money.
For instance, in an interview with Reuters last week, Deutsche Bank Chief Regulatory Officer Sylvie Matherat said the company was fundamentally reviewing its client screening and monitoring processes following scandals that are costing it billions of dollars.
Among other recent high-profile cases, Switzerland's financial watchdog FINMA in May ordered the closure of private bank BSI over a breach of money-laundering regulations linked to scandal-hit Malaysian government fund, 1MDB.
(Reporting by Michael Shields and Joshua Franklin; editing by Mark Heinrich)
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