Publication of Guidance on Digital Customer Lifecycle Risk Management

The Wolfsberg Group is pleased to announce the publication of its Guidance on Digital Customer Lifecycle Risk Management. Technology can enable a Financial Institution to meet both customer expectations on digital engagement and prioritise resources in an effective, risk-based manner and can, if defined and calibrated responsibly, also provide the Financial Institution with an opportunity to build a dynamic understanding of customer risk, refresh relevant customer information on a targeted basis, and pursue new customers without face-to-face interaction – including the financially excluded – while focusing resources to address genuine financial crime threats.

This Guidance explores how non face-to-face customer interaction could be considered a standard, or even lower risk channel for a Financial Institution, by further developing three core AML/CTF controls:

  • More effective identification, verification and authentication processes at the onboarding stage;
  • A multi-dimensional and continually reassessed customer risk profile; and
  • A redesigned trigger-based approach for conducting ongoing due diligence.

Digital approaches to customer lifecycle risk management challenge the traditional view that in-person customer engagement is necessary for Financial Institutions to know their customers and to assess the risk they present of facilitating, or engaging in, financial crime. As recognized by the Financial Action Task Force, non face-to-face customer interaction, if defined and calibrated responsibly, may be a standard or lower risk engagement channel, providing the Financial Institution with an opportunity to adopt new approaches to manage customer risk, address issues of financial inclusion and refocus resources to address genuine financial crime threats.

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