ARTICLE · 01 JUNE 2025

AML/CFT Customer Risk Ratings – Preparing For 1 June 2025

KordaMentha

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With new AML/CFT regulations effective 1 June 2025, New Zealand reporting entities must implement a customer risk rating system for their new customers. Key areas for businesses to consider include the impacts, compliance strategies and the role of technology in meeting these evolving requirements.

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The upcoming Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Amendment Regulations, effective from 1 June 2025, represent a significant shift for New Zealand's financial sector.

Financial institutions have long invested in measures to identify customers and meet regulatory standards. However, as financial crime becomes more sophisticated, maintaining accurate risk ratings and managing the associated workload becomes increasingly challenging.

The new regulations require reporting entities to risk-rate each customer during onboarding and continuously update these ratings as part of ongoing Customer Due Diligence (CDD) and account monitoring. This change aims to standardise the approach to assessing customer risk, ensuring consistency and clarity across the financial sector.

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