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I am a Nationwide checking account customer and also have my mortgage.
Recently, I went to open their one-year fixed savings deal with a rate of 4.15 per cent.
But, to do it, I had to go through a lot of questions and I can’t understand why.
Some made sense: my nationality, for example. But why does my employer need to know the employer’s address, job title, as well as annual income and where the money comes from to open the savings account?
Baffled: Our reader had to answer several tedious questions to open a savings account at Nationwide despite already having a checking account and a mortgage.
Opening a savings account seems quite intrusive. I’m not applying for credit.
It’s been a while since I opened a savings account and I don’t remember all this mumbo-jumbo before.
Helen Kirrane from This is Money responds: You would think that since you already have not only a current account but also a mortgage with Nationwide, you would already have the details requested and could speed up the process of opening a savings account.
Part of the reason for the flurry of questions is due to “know your customer” controls, whose origins date back to the 1970s.
These checks are a standard banking practice adopted around the world to verify the identity of customers. They are set up by banks and financial companies to help detect money laundering and fraud.
I spoke to Nationwide and alluded to these controls when I asked what was going on. He told me that the information he gets from the questions he asks customers when they open accounts helps them detect “unusual activity” and protect customers from fraud and scams.
Although these types of controls are nothing new, banks have stepped up their anti-money laundering and fraud measures in recent years.
They certainly make the experience of opening a new account more awkward, since you have to look up your office’s zip code.
I asked a savings expert for his opinion on your situation.
James Blower, founder of the Savings Guru website, responds: These are all questions that Nationwide uses to help in the fight against fraud and money laundering. Banks are adopting restrictive measures and this is probably the reason why the reader has not had this experience before.
As to whether Nationwide would already have this information because your reader is a checking account and mortgage customer, there could be a few things going on here.
Firstly, it may be duplication, or it may be that some of Nationwide’s systems don’t communicate well with each other (so you can’t pull from the checking account or mortgage apps).
It may be that the information it contains is old; For example, the mortgage and checking account could have been opened a few years ago, so the information needs to be updated.
Finally, Nationwide may not have collected that information when those requests were made for other products.
While I understand to the reader that this may seem intrusive, unfortunately it is increasingly necessary.
To take an extreme example, someone putting £250,000 into a savings account, doing a minimum wage job, but claiming that the savings come from their employment is clearly something that deserves further investigation.
The problem here is that banks and financial professionals have been good at educating people about how credit and credit scoring work, so people understand debt better. But they have done much less to inform them about savings and non-debt products.
Part of this is because a lot of this is relevant to fraud and anti-money laundering and therefore there is some reluctance to share too much about how things work as this will help people those to which these measures are directed.
Most people wouldn’t accept £50,000 in cash from someone they don’t know in exchange for goods or services, with just a name and address.
The same goes for banks: they can’t just keep your savings without knowing more. Some of this will be done discreetly through electronic checks, but some will be done by gathering more information at the application stages.
A Nationwide spokesperson responds: Even where customers have a long-standing relationship with their financial services provider, their circumstances can change over time.
It is important that the information we hold remains accurate, so from time to time we will ask clients to confirm certain details to ensure that we effectively manage the risk of economic crime and comply with the requirements set out in laws, regulations and relevant guidelines.
One of the ways we do this is by asking questions when they open a new account.
We also ask questions to understand how the customer plans to use the account and what is normal for them. This information helps us detect unusual activity and protect our customers from fraud and scams.
While we know this may seem intrusive, we only ask for the information we need to keep Nationwide and its customers safe.
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