National regulations across the globe place a strong emphasis on Customer Due Diligence (CDD) as a key tool in combating financial crime. An essential component of CDD is the economic profile.
This profile goes beyond basic customer information, acting as a comprehensive financial fingerprint. It captures critical data on a client's business activities, transaction patterns, and other relevant details. By analyzing the economic profile data, entities can assess a client's risk level.
Learn:
When is the Economic Profile Created
What Information is Included in the Economic Profile
The Ingredients of a Powerful Economic Profile
The Effect of Incomplete Economic Profiles
The Power of a Complete Economic Profile
When is the Economic Profile Created?
The economic profile is generally formed:
During onboarding or Before Establishing the Business Relationship: At this stage, a regulated entity gathers sufficient information to be able to assess the client's risk level.
Throughout the Business Relationship: Most Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regulations require regulated entities to keep the economic profile updated. This ongoing process involves monitoring transactions and business activities.
What Information is Included in the Economic Profile?
The economic profile goes beyond simply collecting information from the customer. It's about transforming this raw data into a comprehensive picture of a customer's financial health and risk profile. This empowers an entity to:
Establish what is the "normal" and "expected" activity for a specific customer. This includes expected transaction types, volumes, sources, destinations of funds, and geographic distribution.
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