What role does ongoing monitoring play in customer relationships?

Ongoing monitoring is crucial in customer relationships as it helps identify changes in customer risk levels over time. Even after a customer is onboarded, their activities, financial behavior, and even external factors can change, affecting their risk profile. By continuously monitoring transactions and customer behavior, financial institutions can detect unusual activities that may indicate increased risk or potential fraud. This allows for timely responses to emerging risks, ensuring compliance with regulatory requirements and enhancing the institution’s overall risk management framework.

In contrast, considering it unnecessary after onboarding overlooks the dynamic nature of customer behavior and the importance of adapting risk assessments as circumstances evolve. While ongoing monitoring may require resources and effort, it ultimately serves as a proactive measure to safeguard the institution and its customers. Therefore, recognizing and acting on changes in customer risk levels through ongoing monitoring is essential for effective compliance and risk management.