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Getting Client Due Diligence Right from Day One
- Amy Bell
- 2 days ago
- 2 min read
Author, Amy Bell, CEO and Founder of AML Sorted
If I could bottle one message from AMLCO (Anti-Money Laundering Compliance Officer) masterclass, it would be this, client due diligence is not about who you think the client is, it is about the information you collect. I still hear lawyers say things like “not my client”, and it always makes me wince, because the rules do not make exemptions for nice people or familiar faces.
During the session I talked through the most common pushback I hear in firms. Partners look at the risk rating for a matter and tell me “yes, but not my client”.
They assume that because someone appears respectable, cooperative or longstanding, the risk is lower. The legislation does not work on assumptions. It works on information.
“You might have no suspicion at all about this person, but you are still subject to penalty if you have not done the client due diligence.”
That moment in the class always lands. The intention behind the AML/CTF rules is simple. You gather information that might, at some point, raise suspicions and lead to a suspicious matter report. Without doing the checks, you never get that chance to spot the problem in the first place.
The purpose behind the rules of client due diligence
I shared a question someone once asked me, “does AML actually work?”.
After twenty two years in the UK system, my answer is honest. It is hard to show a straight line between a piece of due diligence and a specific arrest, but the system gives law enforcement clues they would never have had otherwise.
The rules exist to give you the opportunity to detect something unusual, not to judge your clients.
Why this matters in Australia right now
With the reforms coming in, firms will need to shift from treating CDD as an administrative step, to understanding it as a risk assessment tool. Many of you are already doing good checks, but not always recording your thought process. When regulators review files, the absence of a clear record is the problem, not the work you actually did.
If you are building or improving your processes ahead of Tranche 2, this is the perfect moment to revisit how your team approaches client due diligence, and how you document it in a consistent way.
A quick takeaway for your team
CDD is required regardless of your personal view of the client
Familiarity is not a risk assessment
The information you gather might become significant later
Your records should show, clearly and simply, your thought process
If you want a smoother way to embed this into your workflows, our Sorted Solutions platform is designed to do exactly that, but for now focus on making sure your team understands the “why” behind each step.
Thanks for reading, and as always, you can always email me if you have any questions.
