Let’s face it, the thought of dealing with your on-going Customer Due Diligence (CDD) obligations is something you really don’t like the sound of, but it’s certainly something you need to take seriously. By this point, you’ve done your compliance programme, and completed your customer risk assessment, but that’s just the start. The on-going CDD requirements for new and existing customers is where the real work starts and is where your new customer’s journey with you begins, so best get it right.

The Big Questions

As a Business Owner, Director, Compliance Officer or other involved employee, there has likely been some in depth discussions around the board room table for how you will deal with the additional administrative burden of CDD. You would have asked yourself several questions;

• What if I get it wrong?
• How much will this cost?
• How long will it take to on-board a customer now?
• What impact will this have on our business?
• What impact will this have on our customers satisfaction?
• How do I deal with this moving forward?

The list will quite clearly go on, but one key question will be, do we do this ourselves? Or do we outsource and get someone to help us with the heavy lifting?

Doing it yourself

By now, you will have already made a preliminary decision on this point and may be giving it a go doing it yourself, maybe even using a software product which helps with a small part of the overall CDD process. There are a number or organisations taking this approach, but many are now seeing first hand that this whole process is a lot more time consuming than they initially anticipated and these software products only help with certain aspects of CDD. They are also seeing their customers become increasingly frustrated with providing paper copies of ID information and having to follow inconsistent on-boarding processes across multiple companies.

Liability

The regulators have made it expressly clear in recent months that they won’t be taking non-compliance lightly. Whilst they will likely be taking a collaborative approach and working to educate Reporting Entities, ignoring requirements will be unacceptable. An honest attempt to get the Customer Due Diligence right will be expected and out sourcing this to an Agent is a good way to mitigate your risk.

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