As part of the international standards, the Financial Action Task Force actually requires that financial institutions and intermediaries in the country have client identification and record-keeping requirements for their foreign branch subsidiaries.
The client identification portion is important as it allows the institutions to determine whether the activities of their clients may be suspicious, or may not be consistent with their profile. It can help them detect and determine suspicious behaviour and, eventually, potentially report transactions, so it's important to detect. It's part of the know-your-client practices.