Due diligence for onboarding an agent or third-party provider
What has happened?
Firms licensed to undertake regulated activities must ensure they have conducted the appropriate due diligence measures when onboarding an agent or a third-party service provider. Similarly, when accepting new financial institutions/regulated entities (for the purpose of holding client money), banks must also conduct the relevant onboarding procedures.
What do you need to do?
Payment Institutions, Account Information Service Providers and Electronic Money Institutions can appoint agents to provide payment services or distribute and redeem e-money on their behalf. However, they are ultimately responsible for their agents’ actions and must ensure that their agent is fully compliant with the relevant regulations and rules. Similarly, firms must ensure that their prospective third-party provider has the ability, capacity and authorisation required to perform the relevant functions, services, or activities reliably and professionally. Before onboarding an agent or a third-party, firms must conduct sufficient checks on the entity to guarantee they are financially stable, trustworthy, and competent.
Likewise, banks have a requirement to complete due diligence measures on financial institutions / regulated entities, ensuring that they fall within their risk appetite. For such onboarding, banks need to ensure their (the institutions’ and entities’) risk appetites match theirs (the banks’), and they (the institutions/entities) have adequate AML and/or compliance frameworks in place.
Such onboarding of an agent/third party, or being onboarded, can be lengthy and at times, complex.
How can we help you?
We provide support for those onboarding another entity or seeking to be onboarded. Our assistance includes the following, but is not limited to:
- Developing/updating relevant application documents
- Undertaking audits (Information Security or Financial Crime/AML), if necessary
- Conducting a gap analysis on the firm’s current policies/procedures and addressing any weaknesses
Our expert team regularly assists firms with meeting onboarding requirements. Each onboarding experience is different; however, our vast experience ensures that we are accurate in developing the appropriate documents and supplying the relevant information.
Contact us today on 0207 436 0630 or email info@thistleinitiatives.co.uk.