CIP Established After 9/11
Following the events of September 11, 2001 in the United States, the government instituted the Customer Identification Program as part of the USA PATRIOT Act. According to the Federal Financial Institutions Examination Council (FFIEC), all banks must have a written CIP on file with the government that is appropriate for its size and type of business. During the account-opening process, banks must obtain the following information from the prospective account holder:
- Date of birth for individuals
- Identification number (such as a SSN)
Seeing Results from a CIP
While the goal of instituting CIP rules may be to identify accounts that are being used to fund terrorist activities, the program has a number of benefits for financial institutions as well. In addition to protecting the safety and security of our country, the program allows organizations to keep tabs on how money is flowing between banks and other financial service providers. In terms of fraud prevention, banks are able to green-light legitimate customers and escalate cases that need further processing. By detailing the CIP and meeting industry requirements, banks and financial institutions spend less time and resources on lengthy manual reviews.
When it comes to customer service, prospective clients feel secure knowing that their bank takes necessary steps to protect their privacy and assets. Identity verification processes show that a bank takes safety and security seriously. As an institution builds its customer identification program, it needs to consider its verification goals and implement a system that achieves these and those of its customers. Develop a thorough CIP to make your goods and services easier to access for your legitimate customers while keeping your business protected from fraud.
IDology, Inc. offers a solutions-driven approach to identity verification and fraud prevention tactics for organizations and financial institutions operating in a customer-not-present environment. Headquartered in Atlanta, GA, IDology has helped clients manage identity verification systems worldwide since 2003.
1. “Core Examination Overview and Procedures for Regulatory Requirements and Related Topics – Customer Identification Program,” Federal Financial Institutions Examination Council (FFIEC), n.d., Web, 2 September 2014.