What are Related Entities?

Share on linkedin
LinkedIn
Share on facebook
Facebook
Share on twitter
Twitter
Share on email
Email

Related entities refer to relationships between a bank’s customers and accounts. Related entities may be:

  • Two people
  • A person and a business
  • Two businesses

Related Entities and Compliance

A bank’s legal lending limit caps the amount that can be loaned to a borrower. Legal lending limits help financial institutions reduce exposure to loan defaults. Tracking related entities helps a bank remain in compliance with these lending regulations.

Documenting Related Entities

Lending decisions often require the banker to obtain a global view of the customer’s relationships with related entities. Unfortunately, tracking related entities in a core system can be challenging and creates time-consuming work to understand:

  • All accounts under the customer’s name
  • Trusts on which a person is listed
  • Accounts held by the customer’s family members

Identifying individual customers who are involved in specific business accounts can be especially difficult, since a customer could be part of multiple corporations, LLCs, etc.

Leveraging Tech to Connect Related Entities

Some banks use account management software to tie related entities together for a comprehensive view of a customer and his or her relationships. For example, AccuAccount offers a “Related Entities” report that lists all linked customer accounts. Related entities information also appears on every AccuAccount customer page, displaying the full relationship of the customer. It also provides clarity to understand other parties tied to that customer.

Compliance Tools & Tips for Bankers

Looking for more information about compliance in the banking industry? Be sure to check out our extensive resource library with free spreadsheets, whitepapers, and ebooks.

Browse our banking definitions page for more terminology.

Free Downloads

Bank auditor who is sitting at a desk and reviewing financial statements

Banks Audit & Exam Prep Study

[Study] Banks Audit & Exam Prep Learn how 187 other community bankers manage audit and exam prep. What’s Covered in this Summary Report? AccuSystems recently conducted a survey of 187 banking professionals, representing over $70 billion in combined assets at

Download for Free »
Desk that contains a laptop with the TicklerTrax spreadsheet

TicklerTrax Exception Spreadsheet

TicklerTrax™ Exception Spreadsheet Downloaded 1,000+ Times Looking for a free spreadsheet to track your financial institution’s exceptions? TicklerTrax might be the perfect tool for you! We’ve taken some of the basic logic from our top-rated document tracking system and boiled it

Download for Free »
Banker's desk that contains a stack of documents, a computer, and smartphone

eBook: Compliance & Bank Document Management

[eBook] Compliance & Bank Document Management Compliance is a tricky subject – especially when your financial institution is reliant on paper documents and manual tickler systems. In this free eBook, published by technology company, AccuSystems, you’ll encounter three compliance-related situations

Download for Free »

Related Articles