After a period of heavy penalties, financial regulators increasingly demand more from banks to ensure their compliance.
As a result of the need to demonstrate their diligence, banks may now query more payments and receipts from customers in this sector. Here are ten reasons why:
1. Money laundering: One of the primary reasons why banks may query receipts from customers in the aviation and logistics sector is to prevent this. Banks must scrutinize transactions carefully as they are required to comply with regulations aimed at preventing the flow of illicit funds
2. Fraud prevention: Fraud is another reason why banks may query receipts from customers. Banks may be interested in verifying the authenticity of receipts to ensure that their customers are not victims of fraud.
3. Sanctions compliance: Banks are required to comply with international sanctions regulations. The aviation and logistics sector can be prone to direct and indirect sanctions violations and banks must ensure that their customers are not engaging in prohibited activities.
4. Risk management: Banks are in the business of managing risk. The aviation and logistics sector presents unique risks. By querying receipts, banks can better understand the risks associated with their customers’ transactions.
5. Know your customer (KYC) requirements: KYC regulations require banks to verify the identity of their customers. By querying receipts, banks can verify the identity of the parties involved in transactions in the aviation and logistics sector.
6. Suspicious activity: Banks may query receipts when they suspect suspicious activity. Unusual transactions in the aviation and logistics sector can trigger alerts that require further investigation.
7. Compliance with anti-corruption laws: The aviation and logistics sector can be prone to corruption and banks are required to comply with anti-corruption laws. By querying receipts, banks can ensure that their customers are not engaging in corrupt activities.
8. Tax compliance: The aviation and logistics sector can involve complex tax issues. Banks may query receipts to ensure that their customers are complying with tax laws.
9. Reputation management: Banks have a reputation to protect, and transactions in the aviation and logistics sector can be complex and high-risk. By querying receipts, banks can mitigate reputational risk.
10. Customer service: Finally, banks may query receipts to provide better customer service. By verifying the authenticity of receipts, banks can ensure that their customers’ transactions are processed quickly and accurately.
In short, there are many reasons why banks may query receipts from customers in the aviation and logistics sector. By doing so, banks can ensure compliance with regulations, manage risk, prevent fraud and corruption and, they would argue, provide better customer service.