Banks Urged to Confirm Customer Information Following Address Changes
Tokyo, Japan - A New Era of Transparency
In light of recent efforts to combat money laundering and terrorist financing, banks in Japan are being reminded to confirm changes in customer information, including address updates. This move is part of the country’s strengthened supervision of financial institutions to ensure compliance with anti-money laundering and counter-terrorist financing (AML/CFT) regulations.
Verification of Customer Information
According to industry sources, financial institutions have been more proactive in verifying customer data, particularly following address changes due to relocation or other reasons. This includes screening against databases of anti-social forces and sanctioned persons during the onboarding process, as well as monitoring transactions to detect suspicious activity and reporting any findings to regulatory authorities.
The Importance of Verification
“Banks must take all necessary measures to verify customer information, including address updates,” said a spokesperson for Japan’s Financial Services Agency (FSA). “This is crucial in preventing the misuse of deposit accounts and ensuring the integrity of our financial system.”
In recent years, Japan has seen an increase in cases where deposit accounts were opened by visitors to the country, only to be sold to criminal organizations upon their return home and used for money laundering purposes.
Measures Implemented
Financial institutions have implemented various measures to prevent such instances, including:
- Screening against databases of anti-social forces and sanctioned persons during the onboarding process
- Monitoring transactions to detect suspicious activity
- Reporting any findings to regulatory authorities
Regulatory Oversight
The FSA has been conducting regular inspections of financial institutions to ensure compliance with AML/CFT regulations. As a result, banks with inadequate governance arrangements may be subject to administrative penalties.
“We urge all banks to take a proactive approach in verifying customer information and ensuring that their AML/CFT measures are robust,” said the FSA spokesperson.
Additional Requirements
In addition to addressing address changes, financial institutions are also required to obtain customers’ prior consent when sharing personal data within their group of companies for customer management purposes. Exemptions may apply in certain circumstances, such as when providing personal data is necessary to protect an individual’s life or property.
The Whistleblower Protection Act also provides protection for employees who report suspected money laundering activity by their employer.
Future Outlook
As Japan prepares for the fifth round of mutual examinations with the Financial Action Task Force (FATF) starting in 2024, it is likely that regulatory authorities will continue to closely supervise financial institutions and impose penalties on those found to be non-compliant.