Tuesday, August 22, 2017


American financial institutions, under increasing pressure from regulators to adopt risk-based compliance programs, have terminated many of their correspondent banking relationships with Caribbean banks. The region's banks have a low volume of international transactions, and its offshore financial centers are often confused with tax havens, and information on their customers is difficult to obtain. De-Risking is the term applied to the policy of ending such relationships for compliance  and risk management reasons.

The result is a massive number of reductions in correspondent banking relationships by US banks, to the dismay of their former Caribbean respondents. Those banks, for whom a US banking relationship must be maintained, in order for their clients to trade in American markets and receive funds from family members who are expats, must now find a workable yet affordable solution.

Social media, which was first utilized by American money service businesses as a means of accessing information on their unbanked* clients, provides a solution to the US banks seeking comprehensive information on the customers of their Caribbean banks, or Know Your Customers' Customers (KYCC). It can bridge the information gap that exists regarding those customers.

Artificial Intelligence (AI) software algorithms that scan social media have the ability to extract personal data information which will satisfy the requirements of onshore banks for KYCC,  such as occupation, employment, educational background, and the assessment of individual risk levels of the bank clients, through direct and indirect relationships, located by the algorithms. Social media software can resolve the de-risking problem of foreign banks.
* Individuals who do not have a bank account. 

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