Bank KYC Due Diligence Fees

[Chimaera]

I see that some banks are now charging fees to conduct their KYC Due Diligence. Do they have a list that they check against and tick off that they have received each document or do they conduct a full investigation for instance by contacting the person who notarised documents or municipality to verify existence of an utilities account or other banks to verify accounts.
In other words do they actually put in the effort to earn the fees that they charge?

 

[Sols]

Yes, they do. Not exactly as you describe but there is a lot of manual work that goes into reviewing an application.

Compliance departments are the biggest departments within most financial institutions. Due to this demand, salaries have gone up for compliance officers so there is a measurable cost for processing of applications. If it takes someone a couple of working hours to review an application, the financial institution reasonably wants to cover some or all of that cost.

The fee is in some cases also meant to filter out time-wasting applicants that won't turn into profitable clients.

 

[JohnnyDoe]

I see that some banks are now charging fees to conduct their KYC Due Diligence. Do they have a list that they check against and tick off that they have received each document or do they conduct a full investigation for instance by contacting the person who notarised documents or municipality to verify existence of an utilities account or other banks to verify accounts.
In other words do they actually put in the effort to earn the fees that they charge?

They don’t do anything of this. They just Google your name and (maybe) have a look at world check. In rare cases they might verify a reference letter. Remember that banks’ compliance departments are run by psycho monkeys.
In fact, it is easier to open an account with a fake ID than explaining you real business to a bank.
KYC fees are just yet another way for banks to steal money from customers. Bankera is a good example of this practice.