Quizzing someone about how they got their money might sound like the behaviour of a prying tabloid reporter. But in these days of heightened awareness of money laundering such questions are routine from a suited banker. And the push to know more and more about your money's origin is even summed up by an official sounding acronym, KYR or "Know Your Customer".

This is not exactly news - a global push for monetary "transparency" has been underway for more than a decade - but in his last days in office, Barry Shailer, the man charged with overseeing that the Bank of Bermuda is compliant in an increasingly regulated environment, said the scrutiny would only intensify.

Mr. Shailer, who steps down this Friday after 33 years with the Island's largest financial institution, said: "We will see it (anti-money laundering regulations) keep going and going. Transparency is the word being used for all of this. And although the thrust of legislation has been in the name of anti-money laundering dealing with the global drug problem, a lot of it is of course based on another agenda which is to cut down on tax evasion," he said.

Mr. Shailer continued: "These days, rightly or wrongly, banks are being held responsible for their customer's actions.

"It is one thing to open an account for a customer, have documentation and the customer tells you what they are going to use the account for. But if they then use it for something else, and this is apparent from the operation of the account, then the bank could be held responsible for not identifying the fact that the account is not being used the way it is supposed to."

Mr. Shailer underscored banks accountability when he revealed that failure to identify "suspicious" account activity could result in hefty fines and even imprisonment for bank personnel. Mr. Shailer said the bank's account monitoring was done by account relationship managers. And if those managers spot what they consider to be an unusual or suspicious transaction, they must report that activity to the bank's money laundering reporting officer. It is a far cry from the way things were when Mr. Shailer started with the bank. He came to Bermuda from London in 1969 and at that time there was no compliance department much less a money laundering reporting officer.

But Mr. Shailer, who took up the post of the bank's first chief compliance officer in 2000, has seen all of this change over the last decade: "We have those mechanisms in all of our offices (the bank now has offices in 14 countries) around the world now, not just in Bermuda. And we have the means on our computers for tracking transactions over a certain size. These are looked at every day.

"Over the years that has been one of the biggest changes that has taken place for the banking industry in general," he concluded. Mr. Shailer said customers don't always understand, or even appreciate, the personal nature of the questions now being asked: "It is important that customers understand why we are asking these questions; we are not doing it for our own entertainment." Mr. Shailer added: "We are not doubting the customer's integrity, but we are required to ask these questions. Sometimes I think the customer thinks the bank is going too far, or maybe the regulations are going too far. But unfortunately this is something that is just growing and growing - the pressure is coming from overseas, from both sides of the Atlantic."

Although Mr. Shailer was the first chief compliance officer, he said: "There were compliance teams in the bank going back many years but what we had to do was pull all of those teams together into a structure with proper reporting lines so that is very clear that the function is being met." Mr. Shailer said cash transactions come in for the highest scrutiny as cash is "have very strict controls on the movement of cash because obviously with money laundering first and foremost the most obvious."

"What you are dealing with is people trying to convert Bermuda dollar cash in to US dollar cash and it is funding the drug trafficking. We are very much on the lookout for that sort of activity," he said. Mr. Shailer continued: "We have a profile of the merchants that deal with the Bank of Bermuda in terms of the kinds of cash that they would typically pay in at any particular time or over a period of time and if we see cash levels going up, we would then make enquiries."