In 2024, according to international regulators, up to 40% of applications for opening a corporate account in a foreign bank are rejected already at the compliance check stage. Even more telling: among the companies that pass the initial screening, about 15% face account blocking within the first year of operation due to non-compliance with AML/KYC requirements.
Today, compliance check in a foreign bank: is not just a formality but a key filter determining access to financial infrastructure, investments, and international markets. Mistakes at this stage can cost not only time and money but also strategic opportunities.
In this article, I, Nikita Veremeev, founder of COREDO, share practical strategies that the COREDO team has developed over years of working with banks in Europe, Asia, and the CIS. Read to the end: you will learn how to pass a compliance check when opening an account in a foreign bank, avoid common mistakes and build a transparent, sustainable business structure that meets the strictest international AML/CFT standards.
Compliance check in a foreign bank: goals, stages, risks
Compliance check in a foreign bank is a multi-level process aimed at client identification (KYC), analysis of the company’s income sources, and assessment of risks associated with money laundering (AML) and terrorism financing (CFT). Bank compliance: is not only a legal requirement but also a tool for managing the bank’s own reputation, protecting against sanctions and tax risks.
Main stages of client verification by the bank
In practice, compliance check consists of several key stages:
- Initial KYC check: collection and analysis of corporate documents, passports, address verification, ownership and control structure. Special attention is paid to the transparency of the business structure, including verification of beneficiaries and politically exposed persons (PEP).
- Due diligence: deep audit of funding sources, analysis of business reputation, check of the company and its partners against international sanctions lists and fraud databases.
- AML check: assessment of risks related to income legalization, real-time transaction monitoring, analysis of compliance with the bank’s internal policies and international AML/CFT standards.
- Financial monitoring: regular operation checks, automated risk assessment systems, internal audit.
Compliance requirements when opening an account: what is important to know
In different jurisdictions, the set of documents and requirements may vary, but the basic principles are unified:
- Founding documents: charter, registration certificate, meeting protocols.
- Beneficiary information: passport data, address confirmation, information on ownership shares.
- Financial statements: balance sheets, cash flow reports, confirmation of the company’s income sources.
- Corporate structure: ownership scheme, information about affiliated companies and partners.
- FATCA and CRS reporting: for companies with international shareholders or operations.
Main risks and reasons for account opening refusal
According to the COREDO team’s experience, the main reasons for refusal to open an account and account blockage in a foreign bank include:
- Non-transparent business structure: complex ownership chains, offshore elements without an explanation of economic rationale.
- Insufficient verification of beneficiaries: presence of PEP, individuals on sanction lists, persons with dubious reputations.
- Unconvincing income sources: lack of supporting documents, mismatch between declared income and actual operations.
- Non-compliance with the bank’s internal regulations: differences in AML/CFT standards, lack of international reporting.
- Jurisdiction-related risks: increased scrutiny of companies from high compliance-risk countries.
KYC and AML check: how to prepare for successful passing
Compliance check is not only a document review but also a test of the maturity of business processes, transparency of corporate connections, and readiness for international regulation.
Which documents and data are most often requested by banks
From COREDO’s practice, the list of mandatory documents for a compliance check includes:
- Founding documents: charter, registration certificate, extract from the register.
- Documents for beneficiaries and directors: passport copies, address confirmation, information on professional experience.
- Financial statements: audited balance sheets, tax returns, bank statements.
- Contracts with key counterparties: confirmation of business reality, analysis of income structure.
- FATCA/CRS reports: for companies with an international shareholder structure.
How to increase the chances of successful compliance passing
Our experience in COREDO has shown that the likelihood of successful compliance passing significantly increases by observing a number of strategic recommendations:
- Maximum transparency: clear disclosure of the corporate structure, funding sources, business connections.
- Preparation for compliance officer questions: pre-prepared answers to typical questions about the account opening purpose, business model, partners.
- Internal audit: regular verification of business processes adherence to international AML/CFT standards.
- Use of automated platforms: integration of fintech solutions for document collection, storage, and transmission.
- Constant business support abroad: professional support at all stages of interaction with the bank.
Compliance features in the EU, Asia, and Africa: a comparative analysis
Compliance check requirements vary significantly depending on the jurisdiction. A deep understanding of these differences allows not only to avoid account opening refusals but also to optimize the corporate structure for international business objectives.
| Jurisdiction | Main KYC/AML requirements | Documents for compliance | Features/Risks |
|---|---|---|---|
| EU | Strict AML/CFT standards, transparency in structure | Statutory documents, income source confirmation, FATCA/CRS reporting | PEP check, high level of automation |
| Asia | Variability between countries, focus on beneficiaries | KYC questionnaire, address confirmation, corporate structure | Special requirements for non-residents, fast checks in fintech banks |
| Africa | Enhanced non-resident control, fraud prevention | Statutory documents, KYC, source of funds confirmation | High blockage risks, unstable regulatory environment |
Compliance procedures in the EU: requirements and nuances
In the EU, banks require maximum transparency of corporate connections, full disclosure of beneficiary and income source information.
COREDO’s practice shows that for companies with an international structure, special attention is paid to FATCA and CRS reporting, as well as reputational risk analysis.
Asian banks: KYC and AML approach features
In Asia, particularly in Singapore and Hong Kong, banks set high demands for business structure transparency and fund origin, but processes are often more flexible and faster due to the integration of compliance platforms and automation.
Solutions implemented by the COREDO team allow minimizing the verification time and ensuring compliance with the bank’s internal policies.
African banks: risks, opportunities, and specifics
Compliance procedures in Africa are characterized by enhanced non-resident control and a focus on fraud prevention.
Under such conditions, account opening support for business and regular internal audits become essential strategy elements.
Technology and compliance automation: modern business solutions
Modern bank compliance is unimaginable without process automation, fintech solution integration, and the use of artificial intelligence for risk assessment and transaction monitoring.
How automated solutions impact account opening speed and ROI
Implementing automated compliance systems allows:
- To reduce verification times: digital identification and electronic documents speed up KYC and AML checks manifold.
- To increase due diligence accuracy: automated risk assessment systems minimize the human factor and the possibility of errors.
- To increase ROI: reduced costs for document collection and verification, acceleration of market entry.
Best practices for compliance platform integration
For successful compliance platform integration, the COREDO team recommends:
- Regular internal audits: verify process compliance with international AML/CFT standards.
- Staff training: improve employee qualifications on compliance and risk management issues.
- Real-time transaction monitoring: automated systems for detecting suspicious transactions.
- Flexible adjustment of the bank’s internal policies: adaptation to business specifics and jurisdiction requirements.
Common mistakes and typical problems when passing compliance
Even experienced entrepreneurs face typical mistakes that lead to account opening refusals or blockage of an already active account.
How the reputation of beneficiaries and business structure affects the bank’s decision
The presence of PEP or individuals with a negative reputation, non-transparent corporate connections, offshore elements without economic justification – all this increases reputational risk and the likelihood of refusal.
What to do if the bank refuses after compliance
Service refusal without explaining reasons: a common practice, especially in banks of the EU and Asia. In this case, it is important to:
- Conduct an internal audit: identify and eliminate refusal reasons, analyze business structure and documents.
- Seek legal support: The COREDO team often helps clients prepare an appeal or select an alternative bank with a more flexible compliance policy.
- Revise internal policies: adapt business processes to the requirements of the chosen jurisdiction.
Key conclusions and practical recommendations for successful compliance check passing
A compliance check in a foreign bank is a strategic stage that determines not only the opening of an account in a foreign bank but also the long-term stability of international business. Based on COREDO’s experience, I recommend:
- Prepare documents and disclose business structure in advance: This minimizes refusal risks and speeds up the verification process.
- Invest in compliance automation and staff training: modern fintech solutions allow integrating KYC/AML processes into daily operations.
- Regularly conduct internal audits and transaction monitoring: This is not only a bank requirement but an effective risk management tool.
- Select banks and jurisdictions considering business specifics and readiness for international regulation: analyze banks’ internal regulations, FATCA/CRS requirements, specifics of working with non-residents.
- Build partnerships with the bank’s compliance officer: openness, willingness for dialogue, and transparency: the key to long-term cooperation.