Bank Secrecy at an Ethical Crossroads

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“…sometimes, the most expedient solution to an ethical dilemma is to get rid of the person who thinks it a dilemma.” (Scrivastava, 2021)

Legally and morally, a bank customer is entitled to the privilege of non-disclosure from any bank with which the customer agrees to enter into a contractual relationship. (Sealey and Hooley, 2008). This privilege for the customer, and duty for the bank, is known as “bank secrecy”. It is undeniable that bank secrecy is a principle and practice that has invariably been a chief cornerstone of the bank-customer relationship universally. This is primarily because it is a feature that safeguards the customer’s fundamental right to privacy (Sealey and Hooley, 2008). However, over the years, the abuse of bank secrecy has resulted in a pervasive criminal enterprise of illicit financial flows (IFFs) in the banking industry (Beer, Coelho, and Leduc, 2019). This prevalence of IFFs under the protection of bank secrecy has seemingly led regulators to find good ground to question the workability of bank secrecy (Beer et al, 2019); especially as communitarian interests such as tax justice, anti-money laundering and sustainability are at stake. 

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