Are You Now Ready For AML Client Risk Profiling?
This article discusses New Zealand’s upcoming changes to AML/CFT Supervisory focus for AML Client Risk Profiling. From 1 June 2025, all businesses operating under New Zealand’s AML/CFT compliance laws will need to demonstrate adequate methodologies for AML Client Risk Profiling. AML360 Regulatory Technology automates this complex process with individual client risk reports. AML360 is an affordable AML/CFT Compliance Platform, for all sized business entities.
Why is AML client risk profiling needed?
When a business is subjected to compliance laws for Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT), they must understand the nature and purpose of a client relationship.
A primary aspect of AML/CFT compliance laws focuses on the need to identify that the client (or customer) is who they claim to be. This aspect of AML/CFT compliance requires identity verification, including confirmation of residential and company addresses.
In some cases where risks are higher, AML/CFT laws expect Enhanced Due Diligence (EDD) to be performed.
EDD obligates the business to understand the source of wealth and/or income of the client/customer.
Depending on the client risk level, further due diligence measures may be required.
AML Risk Profiling of Private Individual
Business relationships with private individuals can be more difficult in determining viability of ‘nature and purpose’ of the account activity.
The ‘Nature and Purpose’ of the private individual’s transactions and/or activity, should be understood at the time of customer onboarding.
The volume of transactions and the value of transactions that the client intends to transact with should be obtained at time of customer onboarding. This type of AML/CFT compliance data should be reviewed when updating client risk ratings.
Detail of the client’s intended transaction activity will be referred to during ongoing monitoring. If there is sufficient information available to assist an Anti-Money Laundering Compliance decision, the business is in a better position to make an informed decision.
Demonstrating AML Compliance
A business should be able to readily identify the category of customers that present greater risk to their AML/CFT regulatory objectives.
Find out more about AML Client Risk Reports.
How Can AML360 Assist with AML Client Risk Profiling?
AML360 is an All-In-One AML/CFT risk-based management platform. The AML/CFT Compliance Platform is designed with subject-matter expertise to meet regulatory requirements for Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT).
AML360 will develop your AML/CFT Client Risk Profiling methodology. We will test for adequacy and provide an AML/CFT advisory report to inform AML/CFT Auditors and AML/CFT Supervisors.
Our AML/CFT Compliance Professionals will ensure your entity’s Anti-Money Laundering Compliance Officer is adequately trained in meeting AML/CFT client risk profiling obligations.