Periodic reviews are necessary for staying compliant with Anti-Money Laundering, Combating the Financing of Terrorism and similar regulations. They also protect the bank from taking on preventable risk and ensure that customer data is up to date.

How often a periodic review is performed varies across different banks and clients as it depends on the bank’s risk model as well as the individual’s perceived risk level. For example, individuals who have suddenly started making large deposits to overseas accounts may be considered a high-risk customer and therefore be reviewed one or more times a year. On the other hand, individuals that show no suspicious activity and a consistent transaction history may be considered low-risk and therefore only be reviewed every few years.

Banks will typically request up to date identification documents, financial statements and information about the ownership structure of legal entities. They will also request added information regarding any and all unusual or suspicious transactions.