FFIEC guidance indicates enhanced due diligence should be applied to which customers?

FFIEC guidance indicates enhanced due diligence should be applied to which customers?

• A. Lower risk customers
• B. All customers
• C. Higher risk customers (Correct)
• D. Never required

Answer: (C)

Enhanced due diligence is the level of scrutiny you apply when a customer presents elevated AML risk. The FFIEC guidance directs institutions to tailor onboarding and ongoing monitoring to the risk level, with higher risk profiles triggering more rigorous information gathering and review. This means you verify more about sources of funds and funds’ purpose, map out ownership and control structures, and implement more frequent transaction monitoring and approvals by senior staff. Lower risk customers are managed with standard due diligence, while applying enhanced due diligence to all customers would be unnecessary and excessive, and never required would ignore real risk signals.

Enhanced due diligence is the level of scrutiny you apply when a customer presents elevated AML risk. The FFIEC guidance directs institutions to tailor onboarding and ongoing monitoring to the risk level, with higher risk profiles triggering more rigorous information gathering and review. This means you verify more about sources of funds and funds’ purpose, map out ownership and control structures, and implement more frequent transaction monitoring and approvals by senior staff. Lower risk customers are managed with standard due diligence, while applying enhanced due diligence to all customers would be unnecessary and excessive, and never required would ignore real risk signals.