Agencies encourage risk-based approach to customer due diligence

Federal financial services regulators issued a joint statement to remind banks of the risk-based approach to assessing customer relationships and conducting customer due diligence.

Details: The joint statement says:

  • No customer type presents a single level of uniform risk or a particular risk profile related to money laundering, terrorist financing, or other illicit financial activity.

  • Customer relationships present varying levels of illicit financial activity risks.

  • Banks must apply a risk-based approach to CDD when developing customer risk profiles.

  • Banks that comply with applicable BSA/AML requirements and effectively manage risks are not prohibited or discouraged from providing banking services to customers of any specific class or type.

  • The agencies encourage banks to mitigate risks based on customer relationships instead of declining to provide banking services to entire categories of customers.