One of the key requirements is to hold information on every customer you onboard to effectively determine that customers level of money laundering and financing of terrorism risk. This information or profile should provide a comprehensive overview of the customer’s identity, financial behaviour, transaction history and any other detail that will assist staff in determining their risk level. 

Here are the top three reasons why creating an AML/CFT profile for new customers is important for your business:

1. Risk mitigation

Creating an AML/CFT profile for new customers allows you to conduct an accurate risk assessment of each customer. This assessment is important because it helps you to a) determine whether a customer presents a high, medium or low risk of being involved in financial crimes and b)  take appropriate measures to mitigate any risk associated with that customer. 

2. Compliance

Regulations require you to conduct due diligence on your customers, including verifying their identity and assessing the risks associated with their financial behaviour. Creating an AML/CFT profile for new customers ensures you have the necessary information to comply with these regulations. Failing to comply with regulations can result in significant fines and reputational damage.

3. Fraud prevention

Fraudulent activities, such as identity theft and money laundering, can be identified by reviewing a customer’s transaction history and financial behaviour. By analysing this information, you can detect suspicious activities and take appropriate action to protect your business. 

In summary, creating an AML/CFT profile for new customers helps your businesses to mitigate risk, stay compliant and prevent fraud – factors that ultimately protect your financial security and reputation. But it is important to remember that it’s not a one-time thing. As you continue to deal with your customers further information may come to light, so make sure you have the most up to date information before proceeding with any additional work for them.

Get in touch with our team if you have any questions or need help setting up AML/CFT profiles for your customers.