FFIEC BSA/AML Examination Manual

Appendix K: Customer Risk versus Due Diligence and Suspicious Activity Monitoring

Appendix K: Customer Risk Versus Due Diligence and Suspicious Activity Monitoring

FOR ILLUSTRATIONONLY

Customer Risk versus Due Diligence and Suspicious Activity Monitor ing Certain customer relationships may pose a higher risk than others. This chart provides an example of how a bank may stratify the risk profile of its customers (see legend and risk levels). Because the nature of the customer is only one variable in assessing risk, this simplified chart is for illustration purposes only. The chart also illustrates the progressive methods of due diligence and suspicious activity monitoring systems that banks may deploy as the risk level rises. (See Observed Methods, below.)

Observed Methods of Due Diligence and Suspicious ActivityMonitoring:

Risk Level:

Customized transaction prof ile with tailored monitoring against transaction prof ile

High

Source of wealth statement, f inancial statement Unique prof ile specif ic to products and services used by customer

Medium

Basic prof ile, generic threshold monitoring

Low

1 2 3 4 5 6 7 8 Legend: Types of Customers / Accounts

1 Resident Consumer Account (DDA, Savings, Time, CD) 2 Nonresident Alien Consumer Account (DDA, Savings, Time, CD) 3 Small Commercial and Franchise Businesses 4 Consumer Weal th Creation (at a threshold appropriate

5 Nonresident Alien Offshore Investor 6 High Net Worth Individuals (Private Banking) 7 Mul tiple Tiered Accts (Money Managers, Financial

Advisors, “Payable Through” Accounts)

to the bank's risk appeti te)

8 Offshore and Shell Companies

FFIEC BSA/AML Examination Manual

K–1

2/27/2015.V2

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