Banks as Big Brother

“AML software will change international banking forever,” said Suheim Sheikh of SDG Software, an Indian software firm hoping to tap into the big new market.

“Governments across the world will have their eyes on bank customers,” he added. “Since the software can monitor so many accounts, so many transactions, all kinds of people will be scrutinized, even those who in theory are just regular people. By default, not just money laundering but anything that violates the law, like tax evasion, will be hard to hide.”

“Any unexplained deposit will get you calls from the bank or the authorities, and you better have the correct answers,” said Cherian Varghese, chairman of Union Bank of India.

“It will study the profiles of other engineers in the same age group and build a pattern based on common traits like, say, the monthly periodicity of salary,” said Tripathi. “If another customer comes along, says he is an engineer and receives deposits every week, the software will raise what we call a red flag. He is suspect.”

(From “Your Money Under More Scrutiny” in Wired News.
“I, for one, welcome our new robot masters.” I hear saying that a lot gets you out of trouble for having a weekly paycheck.

Is this really the sort of world in which we want to live? One in which banks waste money nosing into your business, while ignoring the criminals who will take pains to hide their activity? Where using a bank is as pleasant as getting on an airplane?

5 thoughts on “Banks as Big Brother

  1. Meanwhile, banks are complaining that they have been forced into the role of busybody:
    WASHINGTON — The debate over why banks are filing more suspicious-activity reports than ever has turned into a war of letters among bankers, regulators, and even members of Congress.
    Bankers are complaining that the agencies’ “zero-tolerance” policy for violations has given banks no choice but to flood the agencies with so-called defensive filings. Regulators have responded that hefty fines handed down by the Justice Department have led to the surge in filings.
    Meanwhile, lawmakers, who say the defensive filings are undermining anti-laundering efforts, are urging banks, examiners, and the Justice Department to quickly get on the same page.
    04/26/2005
    American Banker
    Vol. 170, No. 79

  2. A psychologist I know once said that doing more of the same and expecting different results was a fine working definition of insanity.

  3. Sounds horrific — way to force people to start filing their money in a shoe-box under the mattress, again.
    look on the bright side, though — many people in India, Indonesia and similar countries choose the shoe-box option because they cannot trust their bank officials to be honest. at least we don’t have that problem here — or at least, not in the direct, “that guy over there took 50% of my deposit” sense…

  4. What is an alternate solution? The trading of internation funds needs to be monitored somehow. If not the banks, then who? You can’t argue against a centralized “Big Brother” monitoring system and then complain that a distributed system puts too much overhead on the little guy.
    If you ARE suggesting that funds do not need to be monitored then we should just all go back on the gold standard and do away with currency all together.

  5. The trading of internation funds needs to be monitored somehow.
    No, it doesn’t. There’s no evidence that spending time and energy monitoring international funds transfers will lead to a decline in money laundering, drug trafficing, terrorism, or any other crime.
    The multitude of quotes garnered by the Wired reporter show that even the salesguys don’t think this is going to change things. It will simply help the banks help the government collect taxes “more efficiently,” and harrass those who are different.

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