The Importance of Knowing Your Customer
by Dominic Suszek
KNOWING YOUR CUSTOMER is not just a regulatory requirement, it’s good business. The challenge of complying with customer due diligence regulations is far from over. A review of recent regulatory penalties related to the Banks, Broker Dealers and Credit Unions shows that financial institutions are still having issues complying with the level of information they should obtain and retain to comply with Anti-Money Laundering and Counter Terrorism Financing regulations.
“Knowing your customer is not just a regulatory requirement, it’s good business”
The common theme in deficiencies cited is the lack of adequate Know Your Customer and Customer Due Diligence programs. The regulatory orders advised institutions to take the following actions
• Set up a written compliance program to include Customer Due Diligence for high risk customers;
• Develop, adopt and implement a written compliance program, to include Enhanced Due Diligence for high-risk customers;
• Develop, adopt and implement a written Customer Due Diligence program that includes an Enhanced Due Diligence for customers presenting a heightened risk of illicit activity;
• Develop, adopt and implement a written customer due diligence program (with a detailed list of features in the order).
