Question 1

Why does my bank ask where my money came from?

Accepted Answer

Because banks are legally required to, under **anti-money laundering** regulation. It is not suspicion of you personally, and refusing to answer causes more problems than answering.

**The legal framework.** Banks operate under money laundering regulations requiring them to know their customers, monitor activity, and report anything suspicious. The obligations include:

**Customer due diligence** — verifying identity when you open an account, and periodically afterwards.

**Ongoing monitoring** — automated systems flag transactions that are unusual for **that account's own history**, which is why a large deposit into a normally quiet account triggers questions while the same sum elsewhere does not.

**Enhanced due diligence** for higher-risk situations.

**Suspicious Activity Reports** to the National Crime Agency where concerns remain.

**Two distinct things get asked about:**

**Source of funds** — where this specific money came from. Sale of a property, an inheritance, a bonus, a pension lump sum.

**Source of wealth** — how your overall assets were accumulated. Asked less often, usually for large or unusual sums.

**What typically triggers questions:** large cash deposits, a sudden large inbound payment, transfers to or from higher-risk jurisdictions, activity inconsistent with the account's pattern, and unusual international activity.

**The critical point about tipping off.** If a bank has filed a suspicious activity report, it is a **criminal offence for staff to tell you**. This is why explanations can be unhelpfully vague and why accounts are sometimes frozen or closed with no reason given — the staff member is legally prohibited from explaining. Frustrating, and not obstruction.

**What to do:** answer promptly and provide documentary evidence — a completion statement, grant of probate, contract of sale, or payslip. **Keep records** of significant sums, particularly gifts, since these are asked about years later during mortgage applications.

**Solicitors and estate agents have the same obligations**, which is why they ask too.

Question 2

What actually happens to your money when you deposit it in a bank?

Accepted Answer

It stops being your money in the physical sense and becomes a debt the bank owes you. Your balance is an entry in the bank's ledger recording what it must repay on demand — not a box of your notes

Question 3

What is a bank run and why do they happen?

Accepted Answer

A bank run is a large number of depositors withdrawing money simultaneously because they fear the bank will fail — and the crucial feature is that the fear can cause the failure regardless of whether

Question 4

What is Open Banking?

Accepted Answer

Open Banking is a regulatory framework requiring banks to let you share your own account data with, or initiate payments through, authorised third parties — securely, and with your explicit consent.

Question 5

What is authorised push payment fraud and am I protected?

Accepted Answer

Authorised push payment (APP) fraud is when you are tricked into sending money yourself to a criminal. Because you authorised the payment, it was historically treated very differently from fraud

Question 6

Why do international bank transfers take days?

Accepted Answer

Because there is no single global payment system — money does not move between countries so much as a chain of banks update each other's records, and each link adds time. What actually happens.

Question 7

Why are there three credit reference agencies?

Accepted Answer

Because they are competing commercial companies, not a public register. In the UK the three main ones are Experian, Equifax and TransUnion, and each maintains its own separate database. Why this

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