In a previous post, we examined some elements of Know Your Customer (KYC) programs. Now I’m going to drill deeper into what happens when the interests and objectives of customers, banks and regulators don’t converge.
In many cases, this gives rise to disconnects or the possibility of disconnects. For example, when the interests/objectives of the bank and regulator don’t converge, lapses occur. Or when the interest/objectives of the bank and customers don’t converge, experience lags. And when the disconnect is between the customer and the regulator, alternate mechanisms evolve.
Let’s examine the effects of non-convergence between customer and the bank.