One of the most effective ways to manage PEP risk is to embed identification early in the onboarding process, rather than treating it as a separate compliance check afterwards. By building clear PEP questions into the fact-find stage, firms are far more likely to capture accurate information at the outset and reduce the risk of gaps later in the relationship.
It is good practice to ensure clients are asked not only whether they are a PEP, but also whether they are a family member or known close associate of a PEP. This helps reinforce the wider scope of the requirement and avoids the common misunderstanding that PEP status only applies to the individual themselves. Framing the question clearly and neutrally also supports a more open and transparent conversation.
Where possible, firms should supplement client declarations with appropriate screening tools and reliable public sources. This dual approach helps to strengthen the accuracy of the information gathered and supports the firm in demonstrating that reasonable measures have been taken in line with regulatory expectations.
Finally, it is important to ensure that staff understand that identifying a PEP is not a barrier to doing business. Instead, it is the starting point for applying a proportionate, risk-based approach. This helps maintain consistency in decision-making and ensures customers are treated fairly from the outset.
