Which term refers to verifying customers and ongoing monitoring to manage risk?

Study for the Certified Bank Secrecy Act Professional Test. Use flashcards and multiple-choice questions with hints and explanations. Get exam ready!

The term for verifying customers and conducting ongoing monitoring to manage risk is Customer Due Diligence. In anti-money laundering practices, this means identifying and verifying who the customer is using reliable sources, understanding the nature and purpose of the relationship, and then continuously monitoring the customer’s activity to detect and respond to suspicious or risky behavior. This ongoing monitoring helps ensure the relationship remains appropriate for the level of risk and supports timely updates to risk assessments, with enhanced due diligence applied to higher-risk customers.

Credit Rating Review focuses on assessing a borrower’s creditworthiness for lending decisions, not on verifying identity or ongoing risk management. An Identity Check is an important early step in verification but doesn’t encompass the full process of ongoing monitoring and understanding risk over time. An Accounts Verification Procedure sounds like an internal process, but it’s not the recognized term for the comprehensive framework that includes both verification and ongoing monitoring to manage risk.