Barclays Private Banking closed down 300 private client accounts at its New York branch after subjecting its business to a ‘Know-Your-Custom...

Barclays Private Banking closed down 300 private client accounts at its New York branch after subjecting its business to a ‘Know-Your-Customer’ review procedure in line with new compliance guidelines set out in the Wolfsberg Anti-Money Laundering Principles. The closures has meant the bank has incurred a 15% reduction in total account numbers managed in the Big Apple, explained Chris Duncan, wealth management risk director at Barclays Bank. Duncan said that similar account reviews will be carried out across the bank’s international network in due course, but he did not provide further details.

Barclays’ insisted that the reduction in private client business following the compliance-led review was an improvement rather than a set-back, because it indicated that the bank was not harbouring any potential money-laundering accounts. “We will reduce our business as a result of introducing Wolfsberg [compliance guidelines]. Are we frightened? Absolutely not. It takes our eyes off business development for quite a long time but it convinces us that we have a clean book,” said Duncan.

The British house is among the first tier of private banks to actively undertake the upgraded anti-money laundering account review using the Wolfsberg Principles. The new code was introduced in October 2000 by a consortium of 11 private banks, and are similar to the KYC guidance used in most major financial sectors outside the United States. Aside from Barclays, the participating banks include top wealth management houses such as Citigroup Private Bank, UBS, HSBC Republic, Deutsche Bank Private Banking, Société Générale, ABN Amro and Banco Santander Central Hispano. The guidelines were a result of political pressure for the banking industry to tighten its account management procedures after a series of high profile money laundering scandals during the past 24 months.

Duncan noted that an additional positive by-product of the compliance review was that the bank acquired an accurate picture of its current client accounts managed at the branch. As a result Duncan and his team identified non-performing accounts and others that were transferred to different areas of the bank for reasons unrelated to money-laundering procedures. “The review gave us a chance to see what clients we deal with and whether they would be better placed elsewhere within our organisation,” said Duncan.