BSA/AML/CFT Programs & Customer Due Diligence

Financial institutions are required to develop and implement Customer Due Diligence (CDD) policies and procedures and CDD is one of the pillars of your overall BSA/AML/CFT program. When it comes down to it though, there isn’t a lot of guidance as to what that all entails. This is partly because every institution is different and has different risk. At a minimum, 31 CFR 1020.210(b)(5) states a bank must implement…risk-based procedures for conducting ongoing customer due diligence, to include, but not be limited to:

1. Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile; and,
2. Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information. …customer information shall include information regarding the beneficial owners of legal entity customers (as defined in § 1010.230 of this chapter)…

So, what might this look like in practice?

Kevin discussed this during the April meeting of our AML/CFT Membership Group. If you are looking to deep dive into complex BSA/AML/CFT topics and ensure ongoing compliance for your institution, this group is for you! We’d love to have you join us!

Published
2025/06/10