Why ongoing monitoring and clean onboarding matter more than ever
The digital shift: an opportunity and threat
New Zealanders have embraced digital services at a rapid pace, making online identity verification not just a convenience, but a necessity. But as digital onboarding becomes the norm, so do the risks: fraudsters adapt, targeting weaknesses in identity checks and ongoing monitoring. It’s not just about ticking boxes for compliance – it’s about protecting your business, your customers, and New Zealand’s reputation.
Onboarding is the first line of defence
A clean onboarding process is your foundation. It’s not enough to simply collect a name and a driver’s licence. Under New Zealand’s Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT), you must verify identity, understand the nature and purpose of the relationship, and assess the risk profile of every customer. This means gathering data on expected activity, sources of funds, and even intended transaction volumes. Cutting corners here leaves gaps that are hard to close later – and could expose your business to regulatory penalties or worse.
Ongoing Monitoring where risk never sleeps
Here’s the uncomfortable truth: risk isn’t static, a single missed alert could mean hundreds of thousands of dollars in fines. A customer who seemed low-risk at onboarding can change overnight. Maybe their transaction patterns spike, or they start sending funds overseas, or they pop up in adverse media. Ongoing monitoring means continuously reviewing transactions, updating risk profiles, and being alert to red flags – not just at onboarding, but throughout the customer lifecycle. This is now an explicit expectation of New Zealand’s AML/CFT supervisors, with new requirements for client risk rating systems coming into force.
In 2019, an Auckland-based money remitter, was fined $4 million for repeated breaches of anti-money laundering and countering financing of terrorism (AML/CFT) laws. The company failed to conduct proper customer due diligence, monitor transactions, keep records, and maintain an effective AML/CFT program, despite formal warnings and remediation plans from regulators.
Why act now?
- Regulatory pressure: from June 2025, New Zealand businesses must have robust, risk-based client risk rating and monitoring systems or face increased scrutiny and possible penalties.
- Reputation at stake: a single lapse can lead to fines, criminal prosecution, and public loss of trust.
- Fraud moves fast: fraudsters exploit gaps between onboarding and ongoing monitoring. If your systems aren’t connected and dynamic, you’re a target.
What you should do today
- Review your onboarding process: are you truly capturing all necessary data for KYC and risk profiling?
- Implement or upgrade your ongoing monitoring: can you spot unusual patterns, update risk scores, and respond quickly?
- Educate your team: compliance isn’t just a box-tick – it’s a mindset that needs to be embedded across your business.
In New Zealand’s fast-evolving digital landscape, ongoing monitoring and clean onboarding aren’t just regulatory hurdles – they’re essential to protecting your business and your customers. Don’t wait for a warning letter or a headline-grabbing breach. The time to act is now.
To learn more about ongoing monitoring, speak to our team of experts.
