As noted here, KYC is far more than doing a proper and well-executed onboarding interview to understand the profile of your new client or member in the case of a credit union. Are there vulnerabilities that they may be subject to, or could they in fact be one that may be setting up an account for nefarious reasons?
A very important point made by Ms. Binawari is “A customer may present a low risk at onboarding, but risk is not static. It evolves over time based on behaviour, activity, and external factors.”
After onboarding a new client, you just do not throw away the keys and leave them be for the rest of the time they may be with you. You need to pay attention to large amounts of money entering the account and then exit the same week. Why so much money and where is it going internationally if that is the case? Is the business they have said they are in just a shell company and they are using the account to funnel money elsewhere that has no legitimacy to justify what is being transacted? What about rapid withdrawals all of a sudden from a long-term client who has never had any reason nor shown behavior to justify this transactional activity now?
Ongoing monitoring is necessary especially when signals show an account may be used for illegal activity. What is the source of all the money coming into an account? If it comes from individuals, what is it about what this client has told you makes his or her business venture so appealing that it is attracting all this money at once and then being moved offshore?
Periodic KYC reviews should be part of a fraud prevention monitoring program and understanding things evolve that require reexamination of a client’s risk profile so you can best serve their needs at every stage of life.
Tonye (Carina) Binawari
CDD Analyst | KYC Analyst
KYC doesn’t end at onboarding — that’s where the real risk often begins.
A customer may present as low risk at onboarding, but risk is not static. It evolves over time based on behaviour, activity, and external factors.
This is why ongoing monitoring is a critical part of any AML framework.
Key components include:
• Transaction monitoring for unusual or inconsistent activity
• Periodic KYC reviews and refresh
• Adverse media and sanctions screening updates
• Re-assessment of customer risk profiles
The challenge isn’t just detecting suspicious activity — it’s identifying when a customer’s risk profile has changed.
Strong compliance functions don’t just verify customers once — they continuously assess and respond to risk.
In practice, what signals most often trigger a reassessment of customer risk?
#KYC #AML #Compliance #FinancialCrime #TransactionMonitoring
