What standard must a trust officer adhere to, regardless of bank approval?

A trust officer must adhere to the Know-Your-Customer (KYC) standard regardless of bank approval because KYC is a foundational principle in financial services that requires the identification and verification of clients to prevent fraud, money laundering, and ensure compliance with various regulations. This involves understanding a client’s identity, financial situation, and the nature of their transactions.

KYC policies are mandated by law and are critical for maintaining institutional integrity and safeguarding against unlawful activities. Trust officers are responsible for ensuring that adequate due diligence is conducted on every client, which helps institutions maintain a high standard of conduct and risk management.

While other standards, such as the Investment Management Agreement or Escrow guidelines, may be influenced by institutional policies and approvals, KYC is a legal requirement that is imperative for any financial dealings or trust management. Compliance with KYC helps protect not only the institution but also contributes to the overall stability of the financial system.