When conducting a risk assessment, the first step is to get a clear picture of who your client is.
And this is one of the biggest mistakes companies make – not training their employees to understand their clients.
Because understanding your customer should not be treated as a ticking-the-box exercise.
It is about genuinely understanding the individual's or entity's background, activities, and potential risk factors they bring to your business.
Here are some key questions you need to answer to understand your client:
✅ Who are the beneficial owners?
✅ What is the source of their funds?
✅ What is the client's business activity?
✅ Where are they located?
✅ What is their transaction pattern?
These questions are not enough however, it’s a start to help you understand your customer.
Other groups of factors to be considered are:
geographical risks,
product, service or transaction risks, and
delivery channel risks.
Beyond the Basics
While the initial key questions provide a foundational understanding of your client, a thorough risk assessment requires going deeper.
Here are more detailed considerations to answer the question “Who is your client”?
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