In order to avoid taking on customers who present an unacceptable financial or non-financial risk to the bank
We need to be able to identify the types of customers that are likely to pose a higher than average risk.

Banks should develop clear customer acceptance policies and procedures, including a description of the types of customer that are likely to pose a higher than average risk to a bank. In preparing such policies, factors such as customers’ background, country of origin, public or high profile position, linked accounts, business activities or other risk indicators should be considered.

Banks should develop graduated customer acceptance policies and procedures that require more extensive due diligence for higher risk customers. For example, the policies may require the most basic account-opening requirements for a working individual with a small account balance.

It is important that the customer acceptance policy is not so restrictive that it results in a denial of access by the general public to banking services, especially for people who are financially or socially disadvantaged.

On the other hand, quite extensive due diligence would be essential for an individual with a high net worth whose source of funds is unclear. Decisions to enter into business relationships with higher risk customers, such as politically exposed persons, should be taken exclusively at senior management level.

Normal low risk customers will follow a simplified due diligence process.

For customers with higher risk profiles, an enhanced due diligence process should be applied.