Handbook of Anti-Money Laundering.

CHAPTER 18NON-FACE-TO-FACE CUSTOMERS

18.1 WHO ARE NON-FACE-TO-FACE CUSTOMERS?

A non-face-to-face transaction is where a transaction occurs without a customer having to be physically present. Examples of this type of activity include internet banking, telephone banking, credit cards and online share dealing. Non-face-to-face business is becoming increasingly popular in the financial services industry due to increased customer demand, the high costs of maintaining personal customer contact services and the ability to transact from a distance, which has been facilitated by developments in technology and telecommunications.

It is generally agreed that non-face-to-face transactions are more risky than face-to-face transactions, since the primary identification measures which must be carried out cannot include matching the face of the customer with a document. To overcome this, in some countries it is commonplace for there to be requirements for the customer to visit a branch to have their identity confirmed. However, in other countries this is not the case and the financial institution will need to assess the level of risk that the relationship poses to the firm in deciding which procedures to adopt.

Clearly, it is still possible, even with a customer-facing transaction, for identification fraud to be perpetrated. Much of the identification work is designed to link the person that is in front of the firm's employee with some form of official identification documentation which includes ...