Regulatory Alerts2020-08-03
FinCEN Guidance on Frequently Asked Questions Regarding Customer Due Diligence Requirements
The Financial Crimes Enforcement Network issued guidance clarifying that covered financial institutions are not categorically required to collect specific customer data, use prescribed risk-rating methods, or update information on fixed schedules. Instead, institutions must employ risk-based procedures to determine the appropriate level of due diligence, customer risk profiling, and ongoing monitoring necessary to understand the nature and purpose of customer relationships. This approach allows institutions to tailor their compliance efforts to the specific risks posed by individual customers rather than adhering to rigid, one-size-fits-all mandates.
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