Like many of you, I awoke this morning with 9/11 on my mind. For many people, this day will include solemn remembrance of the terror attacks on September 11, 2001 and reflections on our efforts to prevent another such attack. Did you know you encounter one of those crucial efforts every time you open a bank account and are asked for your driver’s license and various other documentation? When this happens, don’t get impatient. Instead, take a moment to remember what it’s all about: Cutting off terrorists and criminals from their cash flows.
In the years since the terrorist attacks, a great deal of effort has gone into strategizing how best to prevent future attacks. Examples of these high-profile efforts are all around us. The federal government authorized the creation of the TSA to implement extensive new security measures in airports; it created the USA PATRIOT Act that authorized extensive new surveillance measures and other intelligence elements; the U.S. and its allies greatly increased their presence in terror hotspots around the globe; individuals looked for ways to support national efforts—in short, most everybody wanted to do something to try to reduce the incidence of terror attacks.
But one of the most effective approaches in fighting terror—and probably the least known outside the industry—has been the efforts of the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and its counterparts in countries around the world. In fact, Title III of the PATRIOT Act was all about securing the international financial system—including the United States—from terrorist financing.
As with most types of crime, following the money—and stopping its movement—is a highly effective tool, and that’s the case with terror, as well. For those of us in the industry, AML/CTF (Anti-money laundering/counter-terrorist financing) go hand in hand—the tools to fight financial crimes mirror those to fight terror financing, and one of the most powerful tools of all is called CDD or KYC, a.k.a. Customer Due Diligence or Know Your Customer.
When you as a customer of a retail financial institution are asked to verify your identity and the source of your funds, this requirement is part of CDD/KYC. And at commercial banks that serve various commercial accounts, extensive CDD is one of the most important tools to keep terrorists and criminals out of the banking system. And if they are out of the banking system, it’s much more difficult to conduct their criminal and terroristic enterprises on a large scale.
On this of all days, we remember the victims of terror crimes in the U.S. and around the world. It’s also worth taking a moment to think about the individuals and organizations that are developing creative and effective measures to protect our personal safety through protecting the integrity of our financial system, a system the access to which is continually sought by criminals and terrorists.
