In July, some ideas to make it easier for businesses to open bank accounts, a process that . Three months later, these ideas are being implemented.

The Luxembourg Bankers’ Association (ABBL) began by sharing a , produced with the House of Entrepreneurship, that guides entrepreneurs through the process. Among other things, it explains the obligations in terms of the anti-money laundering (AML) and know-your-customer (KYC) regulations that apply to banking establishments, and which have led to some of the difficulties in opening an account.

A list of interested banks

The next step has been putting entrepreneurs in touch with the right players. “We put out a call to our members,” says ABBL secretary general , explaining that they focused on three segments that were having particular difficulty opening bank accounts: small and medium-sized enterprises (SMEs), startups and alternative investment funds. The ABBL asked banks whether they wanted these respective types of clients, and compiled a list of the 26 respondents who responded positively: 10 banks were interested in SME clients, 12 in fintech and 20 in funds (some are present on multiple lists). In October, the ABBL .

That a bank has signalled its interest does not, of course, mean that it will accept any and all clients. “The ABBL is not there to prescribe anything to its members,” says Seillès. “The decision to serve a customer or not is a commercial one and is a matter for each establishment to decide.”

The list may not seem terribly long, but is likely to grow with time. “I’m positively surprised that it goes beyond over-the-counter banks,” comments Seillès. If you disregard custodian and international banks, he continues, 26 interested banks is actually “a significant proportion of the offer theoretically available on the market.”

Clarification from the CSSF

The ABBL has also held discussions with the CSSF, Luxembourg’s financial regulator, to ensure that the AML/KYC regulation “is applied in a proportionate manner and in accordance with the texts,” says Seillès, adding: “the intensity of the due diligence obligation will vary according to the actual risks that a structure may represent.” The minutes of a meeting held in July have been sent to ABBL members. In practical terms, the aim is to “bring all the players up to speed on the right approach--something that was clearly needed.”

The ABBL has also asked the CSSF for several clarifications. For example: When you have a complex structure with intermediary companies in between, do you have to systematically identify the managers when at the end of the chain you know who the beneficiaries are? “In the past, the answer tended to be ‘yes,’” says Seillès. “Now, however, on the basis of our reading of the European texts, the answer is ‘no.’” Another point concerns the possibility of obtaining deadlines in the event of remediation (bringing clients into KYC compliance) or the frequency of on-site visits by the CSSF. As well as simplifying the process, the idea, adds Seillès, is to free up employees to concentrate on “actual risks” and on getting new clients.

Training and open finance

The ABBL also supports the training of bank employees, i.e., empowering them to understand and follow the compliance rules that apply when onboarding new clients. A first session, to address securitisation and fund structures--organised together with Alfi, the LPEA and the Luxembourg Capital Markets Association--will take place on 8 November.

Another topic previously raised was open finance, i.e., the sharing of data--particularly KYC data--among economic parties. “This calls for a dedicated infrastructure,” explains Seillès. “We might ask ourselves whether it should not be publicly owned, to guarantee the solidity of the information stored. We are participating in all the efforts being made in this area.”

New requirements for banks?

It is “too early” to judge the effects of these initiatives, says the ABBL secretary general. In any case, the organisation has no statistics yet.

If the problem has not been resolved in two or three years’ time, should banks be required open basic account for businesses, as some people  (in French)? “That’s the role of the legislator,” says Seillès. “But I don’t think it will solve the problem. It would create an obligation on the part of certain banks to examine files, but the outcome--if the file doesn’t meet the regulatory criteria--will be the same.”

“This is a problem that has various causes and which calls for multiple solutions,” he concludes.

This article in Paperjam. It has been translated and edited for Delano.