Which is the most significant risk associated with KYC requirements being considered a low priority not designed into processes and subsequently implemented after the products are already launched?

Which is the most significant risk associated with KYC requirements being considered a low priority not designed into processes and subsequently implemented after the products are already launched?
A . Product launches may not be adequately prepared.
B . Client experience improves as accounts can be opened more quickly.
C . Product launches will motivate frontline to get more customers.
D . Frontline will not complete adequate CDD.

View Answer

Answer: D

Explanation:

Critical Impact:

Absence of CDD processes during product launch leaves the institution exposed to onboarding high-risk customers without proper risk assessment.

Guidelines and Compliance:

FATF standards emphasize embedding CDD in all stages of customer interaction to mitigate ML/TF

risks.