[strogonoff]

I believe KYC is a very good idea fundamentally, and I wish more banks took it seriously with their top customers as well (or more) as with the rest. It’s not in banks’ interests, of course.

And I disagree that terrorism is cheap. Preparation for 9/11 allegedly cost up to $500K. Bojinka plot used fair amount of financing as well. Maybe those couldn’t be caught via financial controls and KYC, or maybe they could.

[vmception]

Correct, I consider that cheap when HSBC subsequently laundered billions of dollars over the following decade after the PATRIOT Act. The same PATRIOT Act that wouldnt have flagged wire transfers the terrorists used even if it existed before 9/11. It's just an opportunistic data collection program on everyone else.

With billions slipping through from any random branch manager at any bank anywhere, how many 9/11s is that? Any time, for any reason, funding secured.

[anonymouse008]

I can't help but see KYC as a means for automated IRS cases. They are swamped and the basic associations from the new datasets are incredibly revealing.

[mrlonglong]

That's because Congress and the Senate out of pure self interest have chosen to restrict the IRS funding for decades. If they had the balls to increase funding I have little doubt they would have found and retrieved taxes rightfully due to the government.

[radicaldreamer]

Expenses are interesting and add up rapidly (as any business owner knows)... 500k over two years for 20 people is only $1000/person/month and that has to account for all living expenses plus whatever else is required (flight training, cover identities, bribes, pay-for-play etc.)

[strogonoff]

Yes, of course the parent did not specify what they thought as “cheap”, I am only pointing out that it is apparently not as cheap as a couple of airplane tickets.

In other words, their point was that all you need is a desire to fly an airplane into a building, but my point is that you need that plus XXX kilodollars (spread over time or not). Reportedly, one of the 9/11 guys was wired $100k in one go[0]—these amounts could be noticed, but dealing with very profitable accounts one might just be too greedy for that.

[0] https://en.m.wikipedia.org/wiki/Responsibility_for_the_Septe...

[from]

But it's not like they put "explosives and other ordinances" in the subject line. For all the bank knew Atta was just some flight school student. If banks were to require justification for every wire transfer, legitimate commerce (also remittances and a bunch of other things) would grind to a halt.

[radicaldreamer]

Also, there are lots of wealthy Saudis all over and 100k probably doesn't even register as a "large" payment in those circles.

[strogonoff]

KYC done properly means the bank understands every customer. What you do in life, what you get normally paid for, etc.

Problem is, it’s tricky to do at scale and the banks want to profit more, so it makes financial sense for them to err on the side of caution with small accounts that are possibly net loss anyway (considering maintenance overhead, etc.) but starting with a certain level of wealth I think they are more than willing to not care.