Profiling customers can well unmask money launderers

FOR the past 10 years, Mr Tan's company had been the dream customer of every property agent. His company bought and sold properties worth millions of dollars in Singapore and overseas. But the joy of the property agents soon turned to dismay when Mr Tan was convicted of money-laundering offences through the sale and purchase of his company's properties.

A money launderer does not identify himself. He could be the person standing next to you on the MRT, or queuing up in front of you to buy coffee. But through profiling, or customer due diligence, you may just be able to spot the occasional bad apple in a portfolio of customers.

The essence of profiling is that you need to know who you are dealing with or, in other words, who your customers really are. Not only do you need to verify your customer's identity but, more importantly, you need to identify who ultimately controls your customer. Information about the customer such as business and risk profiles, where the monies come from, and patterns of transactions also enable you to form expectations of how your customer may behave, which will help to detect suspicious activities in a business relationship.