CDD: When to Review a Customer Relationship

A key component of any BSA Program is customer due diligence. Essentially, institutions need to have a finger on the pulse of customer activity. “How” that gets accomplished and who does it is likely going to differ from institution to institution, but lenders play a key role because they often know their customers better than anyone else. Institutions need to have policies, procedures and processes in place to help determine when the risk associated with a customer relationship appears to be changing or has already changed. Below are a few examples of when a review of a customer relationship might be warranted:

1. Significant and unexplained changes in account activity or payment activity
2. Changes in employment or business operation
3. Changes in ownership of a business entity
4. Red flags identified through suspicious activity monitoring
5. Receipt of law enforcement inquiries and requests
6. Results of negative media search programs
7. Length of time since customer information was gathered and the profile was assessed

Kevin explains more in the video.