Put down the Checklist and get thinking again…

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Put down the Checklist and get thinking again…

One of your editor’s rants on checklists is people who simply work through the list and stop thinking about the particulars of the situation at hand.   In the book “Due Diligence for the Financial Professional 2nd Ed” this particular editor gave this exact rant (about how checklists should not be followed blindly, but rather how intellect should be used in specific cases) and yet still the book still has many check lists.  I admit that we do need something like a checklist which is put in place in order to guide the user. Rather though, let’s call them thought lists, which users can work through yet still attain perspective of the specific case at hand.

A few examples…

A large bank in Africa, a publicly listed and trading company, was opening a correspondent account in Europe.  The bank in Europe asked for the beneficial ownership and identification documents of all of the officers and directors.  The percentage ownership of each officer and director was provided as well as  the key identification documents.  The European bank then asked for the information on all of the rest of the beneficial owners. The response from the African bank was rightly, “Sir – the bank is a publicly listed and trading company.”  The European bank responded, “Yes, I can see that but our bank requires that all owners are disclosed and vetted against the lists of ‘Special Designated Nationals and Terrorists’ – as our compliance department requires this specifically to be done on all shareholders.”

This is a good example of where the use of a checklist has ultimately blinded officials to the particulars of a specific case at hand.  The impasses lasted 3 weeks until the senior African bank manager chose to call head of the European bank’s compliance to see what could be done.  The head of compliance for the European bank- someone much junior to this bank manager – solved in the impasses in about 15 minutes.

The head of compliance in Europe called the head of compliance in the African bank and apologized profusely – and promised none of the gnomes would be allowed to play with account opening forms for correspondent banks ever again. A very good laugh was had at the expense of the specific gnome.

Check lists cannot rule out rational thinking and thus they should not be thought of sentient beings or knowledgeable in any way.  Check lists are a guide, not a rule, for one to use to guide a person though a process.

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