PEP Controls vs Customer Fairness

Segment PEP risk by jurisdiction, role, and tenure so controls are proportionate and defensible rather than blanket restrictions on legitimate customers.

CyberTRIZ analysis · Banking contradiction AML005 · one of 8,235 worked contradictions published by CyberTRIZ.AI

Regulations

FATF EU_GDPR BE_NBB_GOVERNANCE_MANUAL_2022 FAIR_RISK

Business Context

Politically Exposed Persons require additional scrutiny due to potential corruption, bribery, and influence risks. However, treating every PEP relationship as inherently problematic may create unfair outcomes.

Banking TRIZ Resolution

PEP management should distinguish between risk categories, jurisdiction, role, time since office, transaction behaviour, and source of wealth. Controls should be enhanced but proportionate.

Recommended Banking TRIZ Principles

Principle 1 - Segmentation

Principle 3 - Local Quality

Principle 15 - Dynamics

Principle 35 - Parameter Changes

Expected Outcome

Fairer PEP treatment

Better corruption risk detection

Stronger governance

Reduced unnecessary customer friction

TRIZ principles applied

P1 SegmentationP3 Local QualityP15 DynamicsP35 Parameter Changes

Controls that address this (13)

FATF-AML-001 - Implement Risk-Based AML/CFT Approachoperational · critical priority · Implement a risk-based approach to AML/CFT covering: national risk assessment awareness, institutional risk assessment, risk-based allocatio FATF-CDD-001 - Implement FATF-Standard Customer Due Diligenceoperational · critical priority · Apply CDD measures to all customers: identify and verify customer identity, identify beneficial owners, understand the purpose of the busine FATF-R1-001 - Institutional AML/CFT Risk Assessmentgovernance · critical priority · Conduct a comprehensive institutional AML/CFT risk assessment covering: products and services, customer types, delivery channels, and geogra