As the requirement for periodic reviews as part of the CDD process become more frequent, the need to find a less manpower-intensive approach to the process is imperative.

The challenge is not the time required to review the changes on an individual or entity, the issue is the need to check the 80% of customers, whose circumstances have not changed since their last review. Unfortunately, at this point, unless manual checks are conducted, we have no way of determining whether anything that affects the subject’s risk-profile, has occurred.

If we assume a given analyst can handle 3 reviews a day, based on a blend of simple to more complicated cases, we can rightly assume that each review costs around £130 (based on current London analyst rates).

The annual cost to a bank with 5 Million customers, based on a one, three and five-year review cycle.





Number of Clients




% Reviewed Annually








*  Figures do not include management oversight, quality reviews etc.

*  The numbers are an approximate based on feedback from three firms, two in capital markets, one in retail.

A staggering number of organisations are looking at, or have addressed this burden through offshore or nearshore lower cost teams. The offshore resource, however, is becoming progressively more expensive and the management overhead and quality control processes are rendering the policy less attractive/cost effective. The obvious route is to look at ways to automate more of the process, the challenge, however, is establishing what aspects of the process, can be automated?

Event-driven reviews are now the norm, an alert is funnelled from the Transaction Monitoring system, do a review, the client informs you of a change in their company’s ownership structure, do a review, the PEP or sanction status changes- review.

However, these only cover clients who have informed you of a change or, a trigger has been hit by internal monitoring. My belief is that this triggering process, or event-driven review process, can be extended to cover external data sets beyond PEP & sanction. For example, the UK corporate registry receives 5 million document changes every year and in the United States, 14% of people move each year. If these changes can be pre-mapped to a banks client list, then proven, the need to review accounts that have not hit external or internal triggers reduces significantly.

Extending the trigger process, a procedure already recognised as effective could relate to savings by a meaningful amount. A conservative number would be around 30% or, £34 Million based on the numbers above. Other benefits would also be realised, event triggers reduce the banks risk exposure, as alerts are raised in a timelier fashion and standardisation of reviews becomes easier to demonstrate.

ICX4’s approach addresses this issue by combining ALL lists used by the bank, both internal and external, to provide a ‘golden source’ of list data. After all, who wants to review a client twice? The list data is matched and monitored against a selection of global and country-specific data providers, covering registry, electoral roll and regulatory databases. This eliminates up to 30% of the manual activities conducted in the review process.

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