A key aspect of BSA/AML/CFT compliance is knowing “who” your customer is. For example, lenders are going to want to collect a person’s name, address, occupation or business, etc. and then verify certain information to make sure the customer is who they say they are. But it shouldn’t stop there. Customer due diligence is all about filling in the gaps or the “what, where, why and how” about that customer. Of course, the best way to obtain that information is to ask questions. For example, lenders might ask where a customer’s business is located, how many employees they have, whether they operate any ATMs onsite, are they a money service business, etc. All of this information helps an institution create the baseline of a customer risk profile that can be used to help identify suspicious activity later on.
Kevin explains more in the video.