Rethink customer due diligence

To comply with Bank Secrecy Act and Patriot Act regulations, your institution must give every customer an anti-money laundering (AML) risk rating. When you don’t assign an appropriate rating, it negatively affects the quality of customer due diligence (CDD) and the accuracy of your organization’s overall risk assessment. 

It’s a cascading impact – failure to identify risks can lead to deficiencies in your anti-money laundering program. And that leads to fines, enforcement actions and reputation damage. What can you do to streamline compliance and protect against financial and regulatory risk? 

To state it simply: You can use new analytical tools to monitor deviations in a customer’s transactions or personal information in real time. In turn, you can continuously assess the AML risk of each customer relationship and get a clear understanding of how each customer will likely behave in the future.

The customer's risk level helps you decide how often – and how rigorously – you need to monitor their accounts. For example, it may be sufficient to monitor customers with a low risk level using out-of-box algorithms that run run automatically. But customers with higher risk levels may warrant more frequent and robust monitoring.

The goal is to take a more comprehensive and continuous approach to CDD ...

A continuous approach to customer due diligence

The goal is to take a more comprehensive and continuous approach to CDD where risk ratings are always up-to-date and reflect the latest demographic and transactional changes.

Traditional and homegrown CDD systems typically can't support this level of risk management. For example, most entail a manual, time-consuming AML scoring process – which prevents scoring from being done frequently. And not all CDD solutions provide the same level of customer risk analysis. Most analyze risks using the same set of limited factors – demographics, geography, and products and services. And they fail to factor in event-based data, such as instances of suspicious activity, deviations from expected activity and other high-risk events.

Given the constantly changing regulatory landscape and rising compliance costs, it's important to reevaluate your organization's CDD processes and enabling technologies regularly.

Read our white paper about customer due diligence to learn how to evaluate your organization's CDD processes and technology relative to today's risks and needs. And discover how automated analytics tools can help you monitor deviations in customer transactions or personal information in real time – and continuously assess the AML risk of each customer relationship.


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