Starting Business with a New Customer
A business relationship is one you enter into with a customer where both of you expect the relationship to be ongoing. It can be a formal or an informal arrangement. When you establish a new business relationship, the Money Laundering Regulations 2017 and equivalent rules require you to apply customer due diligence before or while the relationship is established.
What to find out
You need to obtain information on:
- the purpose of the relationship
- the intended nature of the relationship, for example where funds will come from and the purpose of transactions
The type of information you may need to collect includes:
- details of the customer’s business or employment
- the source and origin of the funds the customer will use
- recent and current financial statements
- the relationships between signatories and any underlying beneficial owners
- the expected level and type of activity in the relationship
Running the onboarding check
Implementing proper KYC for every new customer is essential to CDD. Automation removes most of the manual effort. A company scanner can access the Companies House database and:
- verify the company registration number at Companies House
- pull the required company data directly from the register
- compare it against the information the customer provided
That is exactly what the UK Companies Monitoring tool on the Hyperflow platform does, so onboarding checks run the same way every time and leave an audit trail.