From 1 June 2025, reporting entities in New Zealand will be required to implement a customer risk-rating system as part of their AML/CFT compliance. The AML/CFT Programme Guideline published in October 2024 provides some insights and expectations from the Supervisors. However, each reporting entity will still need to establish the customer risk assessment framework/methodology based on the nature, size and complexity of their business.

What we know so far
The new requirement means that every new customer will need to be assigned a risk rating based on their potential exposure to money laundering or terrorism financing risks. This assessment typically considers factors such as the customer’s industry, location, transaction behaviour, and how they interact with your business.

This risk rating is regarded as part of the customer due diligence (CDD). Updating CDD information applies both to customers with whom you established a business relationship under the AML/CFT Act, and also to existing customers.

Tips for reporting entities

• Integration with your AML/CFT programme: Your risk-rating process should be embedded into your existing compliance framework, helping to guide decisions on due diligence, monitoring, and reporting.
• Compliance & Commercial Viability – Finding the right balance between meeting regulatory requirements and keeping things practical for the business.
• Comprehensive & Efficient – Providing thorough and detailed assessments without slowing things down.
• Subjective & Objective – Combining expert judgment with clear, structured methodologies to give you a well-rounded view.
• Steps Involved – Completing a risk rating involves a clear, straightforward process:
  • Obtain information – Gather the necessary data from reliable sources.
  • Verify information based on the level of risk – Double-check the details according to the level of risk involved.
  • Utilise the risk assessment methodology – Apply a consistent framework to evaluate and categorise the risk.
  • Make professional judgement – Use expert insight and experience to make a balanced, informed decision.

Next steps

If you need help in developing a simple workable solution specific to your business then contact us. Strategi will also host a webinar to walk you through the changes and what they mean for your business. We are also developing a tool you can use within your business to complete the individual risk rating.

Stay tuned for updates—we will share more information as soon as it becomes available.