Client ID verifications

‍Why is it important?

Verifying identity protects your firm from fraud, sanctions risks, and compliance issues. It also helps your team spot unusual behaviour and avoid delays and risk later on.

How to verify identity

There are different methods of verifying a client’s identity, and your approach should match the level of risk involved. Whether you’re using traditional or digital methods — or both — your checks must meet the legal standard of being independent and reliable.

When to verify

You must verify a client’s identity before forming a business relationship. This includes both ongoing work and one-off tasks like company formations.

Who to verify

You must verify:

• The client (individual or entity)
  
• Any individuals who own, control, or significantly influence the client

This often includes directors, shareholders, partners, or trustees. Each must be verified with the same rigour as the client.

How to verify

Primary methods are:

• Meeting the client in person
  
• Inspecting original photo ID (e.g. passport or driving licence)
  
• Verifying address using documents like utility bills or bank statements
  
• Using electronic databases (e.g. credit reference agencies, Companies House, electoral roll)
  
• Verifying identity through biometric tools like facial recognition
  

Some of these methods will be more efficient than others depending on the number of clients you’re working with, and the nature of those relationships.

A reliable ID verification tool should:

• Use multiple trusted and up-to-date data sources
  
• Provide a clear pass/fail outcome
  
• Record a full audit trail of the check
  
• Store information securely and meet GDPR requirements
  

Sanctions screening

As part of ID verification and ongoing monitoring, you must also screen individuals and organisations against financial sanctions lists. This includes checking whether they, or the countries they operate in, are subject to UK or international sanctions.

For example, if a director of a company appears on a sanctions list, you must report this immediately — even if the rest of the onboarding looks routine.

Common pitfalls

• Accepting documents at face value without checking authenticity
  
• Skipping checks for familiar or “low-risk” clients
  
• Assuming all digital tools are compliant by default
  
• Relying on another firm’s ID checks without reviewing the evidence
  
• Failing to re-verify when client ownership or control changes
  

Summary

Client ID verification is an essential part of AML compliance. It’s not just a technical requirement, but a practical safeguard for your business and your team.

To stay compliant you must:

• Verify identity before starting any work
  
• Use sources that are genuinely independent and reliable
  
• Apply the same checks to connected individuals, not just the client
  
• Keep a clear audit trail of your verification process
  
• Don’t assume someone else’s checks are enough — your firm remains responsible
  
  

This summary was prepared by the Firmcheck content team. The original article was written by an independent AML expert and can be found on our blog.