Opening a bank account

On completion of the above the bank will undertake a review of the information provided including relevant security, identity and credit checks. This includes Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.

So long as all the necessary information has been provided this assessment and security check process should usually take 10 working days. But if greater due diligence is needed it could take longer.

It is important to note that if you have foreign investors, directors or owners this process may take longer as the bank based in the UK will need to undertake checks in the directors’ country of residence or business domain.

It is also important to note that these checks will continue periodically across the life of the account relationship and may require further information/documents to be provided to ensure that the bank’s record of you and your business remains current and compliant with regulatory expectations.

If you are not happy with a decision a bank has made relating to your bank account or a transaction the best course of action is to contact your bank first. Banks are customer-focused organisations and will be happy to deal with any concerns or queries you may have.

If following any discussion you are still not happy with a decision you should raise a formal complaint. This can be done by visiting the relevant banks website for more details about their complaints process. After this, if you still feel that a bank has not handled your case fairly you can contact the Financial Ombudsman Service (FOS).  FOS will be able to look into your complaint when it is about a business bank account and related services.

To do this go to www.financial-ombudsman.org.uk and fill out your details. The Ombudsman will then look into your case with you and your bank.

At times banks may take a decision to exit or cease a relationship. This decision will not be taken without full consideration by the bank and can be driven by a range of factors. 

Where possible banks aim to give customers a period of at least 60 days to be made aware of such a decision and will provide support to enable the customer to find an alternative option. Occasions when such notice is not available will generally be linked to a sanctions issue, a legal issue such a court order, or a potential criminal offence has occurred.  In those circumstances, the information the bank will be able to share about the reasons for the decision may be limited for legal and compliance reasons.

If exiting of the account service is necessary and a business has any questions then the first point of reference should be to contact your bank, or, if needed, the complaints process as mentioned above.

Banks and other financial institutions are required, by law, to undertake certain checks before providing bank accounts or finance to businesses.

Anti-money laundering (AML) legislation and procedures seek to prevent criminals and terrorists from using financial products or services to store and move their money around. Banks and other financial institutions in the UK are required to comply with AML laws. They must also meet Know Your Customer (KYC) requirements within their obligations under AML laws and comply with regulators’ guidance.

These laws mean banks and finance providers are required to ask for and periodically re-verify information about you and your business. It’s a legal requirement to do this, and it helps to reduce criminal activity and protect your business from potential fraud too.

Importantly, AML laws don’t only apply to banks, financial institutions and credit providers. Businesses (and some individuals) in various other industries must register with a supervisory body for money laundering regulations. These include:

• Accountants, tax advisers, auditors and insolvency practitioners;
• Independent legal professionals;
• Trust and company service providers;
• Estate agents and letting agents;
• Casinos;
• High value dealers (handling cash payments of €10,000 or more in exchange for goods);
• Art market participants (buying, selling or storing art worth €10,000 or more).

The main AML laws in the UK are the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. They apply across a range of sectors and institutions. Banks must also comply with the Financial Services and Markets Act 2023 (FSMA) and requirements set by their regulators (Prudential Regulation Authority, a division of the Bank of England, Financial Conduct Authority, and the Bank of England itself).

Gathering KYC information, verifying it, and keeping it up to date also helps banks adhere to Anti-Money Laundering (AML) legislation worldwide and to the strict financial sanctions regimes in place across the globe.  Financial sanctions regimes, in particular, are evolving quickly which can mean changing requirements on financial institutions and their customers. The regulations require banks to perform ‘Customer Due Diligence’ (CDD) measures including:

• Identifying and verifying a customer’s identity on the basis of documents, data or information obtained from a reliable and independent source;
• Identifying, where applicable, any beneficial owners and verifying their identities on a risk sensitive basis;
• Obtaining information on the purpose and intended nature of the business relationship as well things like source/origin of funds;
• There are also additional enhanced due diligence requirements for Politically Exposed Persons (PEPs), specifically around sources of wealth.

Regulations also require banks to understand the purpose and intended nature of the business relationship; this includes understanding where their customers’ funds and wealth come from.

Banks are required to take a risk-based approach, and therefore must obtain sufficient information to develop a comprehensive profile of the customer and (where applicable) any beneficial owners, and to understand the risks associated with the business to ensure it is within appetite.

Banks must perform KYC checks when an account is first opened and are required to regularly re-verify their KYC information. This is usually done at least annually for high-risk customers and every two to four years for medium and lower risk customers.

Sometimes it may feel onerous to respond to your bank’s request to verify information it holds about you and your business. But it is doing so to detect and prevent criminal activity – and because it must, under law, follow these AML and KYC procedures. This also helps banks to protect customers from fraud.

• AIB
• Allied Irish Bank (GB)
• Bank of Ireland
• Bank of Scotland
• Barclays Bank
• Danske Bank
• Handelsbanken
• HSBC
• Lloyds Bank
• Metro Bank
• NatWest
• Royal Bank of Scotland
• Santander
• The Co-operative Bank
• TSB Bank
• Ulster Bank
• Virgin Money