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The BSP Enjoins BSFIs to Revisit Existing KYC Practices

04.29.2016

In light of the reported unauthorized disclosure of voters’ registration records, the Bangko Sentral ng Pilipinas (BSP) issued Memorandum No. M-2016-005 on 22 April 2016 enjoining all BSP-supervised financial institutions (BSFIs) to revisit their Know-Your-Customer (KYC) practices and exercise extra vigilance against possible misuse of said information. The BSP said BSFIs should take extra precaution in ensuring the authenticity of clients’ identity as the leaked information may be used as a starting point for identity theft and unauthorized financial transactions.

This Memorandum complements BSP Circular No. 706 dated 05 January 2011, which contains provisions on risk-based customer acceptance, customer identification, and validation procedures.

As a matter of practice, most BSFIs already require existing clients, particularly those that conduct financial transactions over the phone, to provide additional information that are mutually known only between the bank and the customer, such as account numbers, recent transactions, or other relevant information. In addition, BSFIs conduct selective cross-checks with other agencies/companies as part of their due diligence procedures for new clients.

The BSP also advises account holders to regularly monitor the activity on their accounts and to immediately report any suspicious transactions to their banks.

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