Client Risk Assessment Template

Defining Client Risk

Most firms have some form of obligation to carry out due diligence on new and existing clients. This can be to comply with the Money Laundering Regulations, for contract compliance or to meet industry standards. Standard due diligence covers general onboarding questions and verification. However, how does a business know if an enhanced due diligence assessment is required?

By carrying out a Client Risk Assessment, a firm can identify if a client is considered high-risk and/or should be subject to additional Enhanced Due Diligence (EDD). For such clients, it is usually mandatory to apply ongoing monitoring and assessments as well. For those with obligations under the MLR, the criteria defining a ‘high-risk‘ client are specified throughout the rules. This enables a business to develop a standard client risk assessment template to support their due diligence compliance program.

High Risk Questions and Criteria

There are more than 25 questions and criteria that should be used to assess if enhanced due diligence is necessary. Some of these questions are business type or industry specific and will differ for each business. However, many are standard, set questions that enable the vertification of high-risk individuals. These include, but are not limited to: –

• Have you verified the identity of all relevant persons
• Have any of the above been identified as a politically exposed person (PEP)?
• Are any of the above a high-net-worth individual?
• Have you obtained evidence to verify the source of funds and wealth for each relevant person?
• Is the client based outside the UK?
• Have you completed online adverse media checks on the client?
• Have you identified the clients’ key stakeholders?

Ready to Use Client Risk Assessment Template

If you have obligations under the Money Laundering Regulations, you have a legal obligation to perform due diligence and assess the risk posed by clients. Gathering adequate and appropriate information and verifying who you are working with is an essential part of your due diligence obligations. Completing client risk assessments is at the heart of this process.

Our Client Onboarding Questionnaires & Risk Assessment covers both individiual and corporate clients and enable you to complete the mandatory Know Your Customer requirements quickly and easily. It is suitable for any industry and includes client onboarding questionnaires, extensive risk assessment questions to identify high-risk clients and enhanced due diligence assessment criteria.