BSA/AML: Customer Risk Profiles

Developing a customer’s risk profile is essential to a sound BSA/AML program. Banks should have written procedures that allow them to understand the nature and purpose of an account relationship so that unusual or suspicious activity can be detected. Ongoing monitoring is also a necessity. There is actually quite a bit of flexibility allowed, and procedures will vary by bank and customer base. It’s not uncommon for us to go into banks where they are doing this, but their procedures are not formalized in writing.

Kevin explains more in the video.

Video Highlights:

• Financial institutions must have written, risk-based procedures for conducting customer due diligence.
• The customer risk profile should allow for ongoing monitoring and updating of information over time.
• The purpose of this is to understand normal activity so suspicious activity can be identified more easily.

Published
2023/05/11