Ongoing Customer Due Diligence: Time to rethink the status quo
Ongoing Customer Due Diligence (OCDD) is often seen as a compliance obligation, a box to tick, a process to revisit only when regulators come knocking. But today, that mindset is increasingly risky, both for business and for the broader community.
Risk is always moving
Financial crime does not stand still. The tactics of bad actors evolve daily, and so do the expectations of regulators. AUSTRAC’s recent enforcement actions and ongoing reforms underscore a simple truth: what was “good enough” yesterday may fall short tomorrow. Businesses that treat OCDD as a one-off exercise rather than a living, breathing process, are finding themselves exposed to regulatory penalties, operational disruption, and reputational harm.
The hidden cost of manual and outdated OCDD
Many Australian organisations still rely on legacy systems or manual processes to manage OCDD. This approach is not just inefficient, it’s dangerous. When risk profiles change or new threats emerge, manual reviews and fragmented data can let suspicious activity slip through the cracks. The cost? Not just potential fines, but the risk of enabling money laundering, terrorism financing, or fraud that can erode trust and damage your brand.
What’s changing and why it matters
Regulatory reform is accelerating. Australia’s AML/CTF regime is shifting toward an outcomes-based framework, with a clear expectation that businesses will actively understand and manage their AML/CTF risks throughout the customer lifecycle not just at onboarding. Enhanced Customer Due Diligence (ECDD) triggers are expanding, and non-compliance with OCDD requirements can now lead to civil penalties.
Regulators are also getting more sophisticated, using data and technology to spot gaps in compliance and taking a proactive, interventionist stance. The message is clear: ongoing monitoring, timely risk reviews, and robust audit trails are no longer optional - they are essential.
OCDD as a strategic advantage
Forward-thinking entities are reframing OCDD as a strategic asset. By integrating automated monitoring, dynamic risk assessment, and regular customer data reviews, they are able to:
- Detect emerging risks and suspicious activity in real time.
- Respond rapidly to regulatory changes and new threats.
- Reduce the operational burden and costs of manual remediation.
- Build trust with customers and partners by demonstrating a proactive approach to compliance.
What does effective OCDD look like?
- Ongoing monitoring: removes the need for manual re-checks and the risk of outdated data, keeping your risk assessments accurate and your compliance processes running smoothly.
- Dynamic risk profiling: updating customer risk ratings as new information or activities arise, whether it’s a change in ownership, a new business line, or a shift in transaction geography.
- Regular data reviews and reverification: ensuring customer information stays current and accurate, and that risk assessments reflect the latest realities.
- Clear escalation and reporting protocols: addressing high-risk cases promptly and appropriately.
OCDD is not just about avoiding penalties, it’s about protecting your business, your customers, and the integrity of Australia’s financial system. As regulatory expectations rise and financial crime grows more complex, the organisations that thrive will be those that treat OCDD as an ongoing commitment, not a compliance afterthought.
Now is the time to invest in smarter processes, better technology, and a culture of continuous vigilance. Because in compliance, as in risk, standing still is not an option!
Get in touch with our team of experts today to support your business OCDD requirements.
