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KYC compliance is already getting painful for ordinary bank customers. Please don't bring in more surveillance.

harry8 6y ago
Strawman argument. More surveillance is _not_ what I have proposed. There is an argument that we could have signficantly /less/ regulation if regulation were taken seriously from the top down. This would encourage it to be taken seriously.
- SpicyLemonZest 6y ago
  What kinds of systems did you have in mind, then? It's hard to see how a CEO could keep personal tabs on all the bank's activities without automated surveillance - it's not like she can individually review every deal the bank makes.
  - helsinkiandrew 6y ago
    No but she puts the organisation and processes in place so that the deals are reviewed with a chain of responsibility
    - SpicyLemonZest 6y ago
      That's how it works today. The problem is that any sequence of links in the chain can decide to lie. That's how most major banking scandals happen; some guy, his boss, and maybe his boss's boss conspire against the rest of the chain to be dishonest together. I feel like I end up circling to 1MDB very often here, but it's just such a good example; the 1MDB bankers had to lie extensively to the chain of responsibility at Goldman Sachs, since the compliance department had repeatedly instructed people not to do business with their major point of contact.
      - TeMPOraL 6y ago
        An investigation will reveal a subset of the people in the chain involved in the misdeed and/or coverup. Could the following process work? 1. Identify the subset of people involved and color them red. 2. For each of the red-colored nodes, color their immediate superiors yellow if not colored. 3. Until there are only uncolored or blue nodes left in the company, do: 3a. Put all red and yellow nodes in front of a court (presumably in parallel) 3b. When a verdict is reached for a given node, color it blue. 3c. If a yellow node is revealed to be involved, color it red, and goto step 2. 3d. If an investigation reveals further people possibly involved, color them yellow, goto step 2. This is based on a principle of "your subordinate, your responsibility", and is meant to give everyone involved and their superiors a fair chance of landing jail time. I would hope the courts are already doing something like this.
    - deleted 6y ago
      [deleted]
  - montagg 6y ago
    What forces do you think are capable of causing leaders at financial institutions to internalize the cost of criminal banking activity such that they adequately prevent it?
    - SpicyLemonZest 6y ago
      I don't agree with the premise. The way to fight criminal banking activity is to write clear, straightforward, and consistently enforced laws. No system of incentives is going to meaningfully reduce financial crime in a world where grey areas are gigantic and almost all cases end with a settlement.
      - bitcoinbutter 6y ago
        You can try to write all the laws you want, eventually it boils down to manually reviewing a ton of transactions and everyone loses. The bank needs to pay for growing compliance departments, customers are scrutinized on a growing number of transactions. Small businesses who are in higher risk industries, however that is chosen to be defined, become inundated with KYC tasks. Every transaction needs an accompanying stack of documents showing the entire trail. Finance is becoming a bureaucratic hellhole which disproportionately affects lower income people and small businesses. If you don't have a hired compliance agent you will spend your time as a business owner complying to endless demands for onboarding/KYC/transaction reporting.
  - Oricle 6y ago
    1. Remove the enemie from all gentile countries! 2. Problem solved for everyone!
  - mensetmanusman 6y ago
    Random auditing by machine learning algorithms looking for suspect transactions.
    - hdjdbtbgwjsn 6y ago
      That is already done.
- verroq 6y ago
  Let’s be real here, the only thing these banks would do is impose more draconian KYC/AML on customers to cover their ass. Whatever it takes to tick that box.
  - CryptoPunk 6y ago
    Exactly: this is the warrantless mass-surveillance approach to combatting crime. But add a few buzz words about big banks, CEOs with hefty salaries not being held accountable, and drug cartels, and suddenly everyone's for it. And it's overt surveillance, where privacy is blatantly criminalized, rather than the type of covert mass-surveillance we're accustomed to hearing about, where a 3 letter agency secretly deprives you of your privacy, showing you enough respect to not demand that you knowingly give it up. So-called anti-money laundering laws are a complete and utter violation of democratic principles, namely privacy and due process, and create the kind of surveillance apparatus that puts the populace under the complete control of the state.
    - bitcoinbutter 6y ago
      You're guilty until proven innocent on nearly every regulated financial service platform. Prepare to explain with evidence how you got the money, why it's being sent, and who it's being sent to, at a moment's notice. Otherwise expect to be separated from your balance on said platform indefinitely.
      - CryptoPunk 6y ago
        Exactly. Money is treated differently than every other medium. As soon as you use it, traditional democratic principles are ignored, and the population is largely okay with that. The public support for this kind of double standard translates to: "we support you being secure in your rights, unless you want to do something meaningful, like send, receive or possess economic value". As long as these broad invasions of AML laws into privacy are in place, the West's support for the principles of liberal democracy looks superficial.
- deleted 6y ago
  [deleted]
jbverschoor 6y ago
For ordinary customers yes, for fraudulent customers, I think they have other ways. In the end the KPIs are probably something like “number of accounts blocked”, which is easier with ordinary customers

Strawman argument. More surveillance is _not_ what I have proposed. There is an argument that we could have signficantly /less/ regulation if regulation were taken seriously from the top down. This would encourage it to be taken seriously.

SpicyLemonZest 6y ago
What kinds of systems did you have in mind, then? It's hard to see how a CEO could keep personal tabs on all the bank's activities without automated surveillance - it's not like she can individually review every deal the bank makes.
- helsinkiandrew 6y ago
  No but she puts the organisation and processes in place so that the deals are reviewed with a chain of responsibility
  - SpicyLemonZest 6y ago
    That's how it works today. The problem is that any sequence of links in the chain can decide to lie. That's how most major banking scandals happen; some guy, his boss, and maybe his boss's boss conspire against the rest of the chain to be dishonest together. I feel like I end up circling to 1MDB very often here, but it's just such a good example; the 1MDB bankers had to lie extensively to the chain of responsibility at Goldman Sachs, since the compliance department had repeatedly instructed people not to do business with their major point of contact.
    - TeMPOraL 6y ago
      An investigation will reveal a subset of the people in the chain involved in the misdeed and/or coverup. Could the following process work? 1. Identify the subset of people involved and color them red. 2. For each of the red-colored nodes, color their immediate superiors yellow if not colored. 3. Until there are only uncolored or blue nodes left in the company, do: 3a. Put all red and yellow nodes in front of a court (presumably in parallel) 3b. When a verdict is reached for a given node, color it blue. 3c. If a yellow node is revealed to be involved, color it red, and goto step 2. 3d. If an investigation reveals further people possibly involved, color them yellow, goto step 2. This is based on a principle of "your subordinate, your responsibility", and is meant to give everyone involved and their superiors a fair chance of landing jail time. I would hope the courts are already doing something like this.
  - deleted 6y ago
    [deleted]
- montagg 6y ago
  What forces do you think are capable of causing leaders at financial institutions to internalize the cost of criminal banking activity such that they adequately prevent it?
  - SpicyLemonZest 6y ago
    I don't agree with the premise. The way to fight criminal banking activity is to write clear, straightforward, and consistently enforced laws. No system of incentives is going to meaningfully reduce financial crime in a world where grey areas are gigantic and almost all cases end with a settlement.
    - bitcoinbutter 6y ago
      You can try to write all the laws you want, eventually it boils down to manually reviewing a ton of transactions and everyone loses. The bank needs to pay for growing compliance departments, customers are scrutinized on a growing number of transactions. Small businesses who are in higher risk industries, however that is chosen to be defined, become inundated with KYC tasks. Every transaction needs an accompanying stack of documents showing the entire trail. Finance is becoming a bureaucratic hellhole which disproportionately affects lower income people and small businesses. If you don't have a hired compliance agent you will spend your time as a business owner complying to endless demands for onboarding/KYC/transaction reporting.
- Oricle 6y ago
  1. Remove the enemie from all gentile countries! 2. Problem solved for everyone!
- mensetmanusman 6y ago
  Random auditing by machine learning algorithms looking for suspect transactions.
  - hdjdbtbgwjsn 6y ago
    That is already done.
verroq 6y ago
Let’s be real here, the only thing these banks would do is impose more draconian KYC/AML on customers to cover their ass. Whatever it takes to tick that box.
- CryptoPunk 6y ago
  Exactly: this is the warrantless mass-surveillance approach to combatting crime. But add a few buzz words about big banks, CEOs with hefty salaries not being held accountable, and drug cartels, and suddenly everyone's for it. And it's overt surveillance, where privacy is blatantly criminalized, rather than the type of covert mass-surveillance we're accustomed to hearing about, where a 3 letter agency secretly deprives you of your privacy, showing you enough respect to not demand that you knowingly give it up. So-called anti-money laundering laws are a complete and utter violation of democratic principles, namely privacy and due process, and create the kind of surveillance apparatus that puts the populace under the complete control of the state.
  - bitcoinbutter 6y ago
    You're guilty until proven innocent on nearly every regulated financial service platform. Prepare to explain with evidence how you got the money, why it's being sent, and who it's being sent to, at a moment's notice. Otherwise expect to be separated from your balance on said platform indefinitely.
    - CryptoPunk 6y ago
      Exactly. Money is treated differently than every other medium. As soon as you use it, traditional democratic principles are ignored, and the population is largely okay with that. The public support for this kind of double standard translates to: "we support you being secure in your rights, unless you want to do something meaningful, like send, receive or possess economic value". As long as these broad invasions of AML laws into privacy are in place, the West's support for the principles of liberal democracy looks superficial.
deleted 6y ago
[deleted]

jbverschoor 6y ago

For ordinary customers yes, for fraudulent customers, I think they have other ways. In the end the KPIs are probably something like “number of accounts blocked”, which is easier with ordinary customers