Research & Analysis
Publication

Risk-Based Customer Due Diligence: Regulatory Approaches

Regulators face a challenge in balancing policies on anti-money laundering and combating the financing of terrorism against placing the least burden on outreach to the poor and unbanked. This Technical Note provides guidance on using risk-based approaches to customer due diligence (CDD), supported by examples drawn from around the world. There are three regulatory options for employing risk-based CDD:

  1. Principles-based approach
  2. Single low-risk threshold
  3. Framework of multiple risk tiers.

Each requires regulators to determine the level of risk and then to decide the appropriate processes of simplified due diligence.

Topic: Enabling and Responsible Financial Policy
Sub-topics: Regulation, Consumer Protection

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Publication

Climate Risk and Financial Inclusion: A Regulatory Perspective

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Reading Deck

Social Media Monitoring to Assess Consumer Risks in Digital Credit Apps: Guidance for Supervisors from an India Pilot

To better understand the digital consumer credit and the risks they pose for customers, this reading deck contains supervisory guidance on the use of a branch of AI, Natural Language Processing (NLP), for social media monitoring. It is based on insights and lessons from an India pilot and provides examples of social media analyses carried out as part of that pilot.