Ongoing Monitoring Done Right

Onboarding tells you who a customer is today. Ongoing monitoring tells you whether that picture still holds, and that is where most real risk surfaces.

Ongoing customer due diligence is an obligation

The AML/CTF regime requires ongoing customer due diligence (OCDD), not just initial CDD. That means keeping customer information up to date, monitoring transactions and behaviour, and applying additional scrutiny where the risk warrants it, throughout the relationship.

Run a transaction monitoring program

A transaction monitoring program is designed to identify activity that is unusual, complex or inconsistent with what you know about the customer. The point is not to flag everything, but to surface the genuinely anomalous for human review.

Watch for trigger events

Certain events should prompt a review regardless of schedule:

• A change in ownership, control or structure;
• A new sanctions or PEP match arising from list updates;
• Adverse media or law enforcement attention;
• A significant change in transaction behaviour; and
• Provision of a new, higher risk service to an existing customer.

Schedule periodic reviews by risk

Use the customer’s risk rating to drive how often you formally review them, higher risk customers more frequently, lower risk customers less so. Each review should refresh identification information, re confirm the rating, and document the outcome.

Manage alerts as cases, and escalate

Treat monitoring alerts as cases with a defined lifecycle: open, investigate, review, escalate, resolve. Where activity gives rise to a relevant suspicion, the matter should be escalated and, if required, a suspicious matter report lodged with AUSTRAC within the applicable timeframe.