Gatekeeper professions, including lawyers, accountants, real estate agents and trust and company service providers, occupy a pivotal position in the fight against illicit finance. These professionals frequently act as intermediaries in high-value or complex transactions, giving them unique visibility into client behaviour and financial flows.
With this vantage point comes significant responsibility: they are expected to identify, assess and report suspicious activity that could point to money laundering or terrorist financing, claims Arctic Intelligence.
As regulators continue to emphasise the risks associated with professional service firms, effective due diligence has never been more important.
KYC and CDD processes underpin efforts to maintain financial integrity by ensuring professionals understand exactly who they are dealing with and the risks a client may pose. As criminal networks adopt more sophisticated laundering techniques, the regulatory expectations placed on gatekeepers have grown. Professionals must therefore develop a thorough understanding of the frameworks governing these obligations and the steps required to identify potentially illicit behaviour. As scrutiny intensifies globally, KYC and CDD have become indispensable for ensuring compliance and protecting the wider financial system.
Gatekeepers’ role in maintaining financial integrity extends well beyond standard client service. Lawyers advising on corporate structuring, accountants providing financial planning, real estate agents brokering property transactions, and TCSPs establishing companies or trusts all touch areas vulnerable to misuse. Their work often involves cross-border transactions, complex ownership chains and high-value asset transfers. This exposure puts them at particular risk of being exploited by bad actors seeking to legitimise illicit funds. Because of this, KYC and CDD are central safeguards across these professions.
The regulatory landscape surrounding client due diligence has expanded considerably in recent years. At the global level, the Financial Action Task Force sets expectations for anti-money laundering and counter-terrorist financing efforts. Its standards influence legislation around the world, including the EU’s 4th and 5th Anti-Money Laundering Directives, which impose strict due diligence rules on legal, financial and property professionals. In the U.S. these obligations stem from the Bank Secrecy Act and the USA PATRIOT Act, with oversight from FinCEN. The UK’s Money Laundering Regulations similarly require professionals to identify clients, assess risk and submit suspicious activity reports to the NCA. Collectively, these frameworks reinforce the need for robust KYC practices across all gatekeeper sectors.
CDD is built on several core principles designed to ensure professionals gather adequate information to determine who their clients are and what risks they present. The first stage—identification and verification—requires confirming a client’s identity using reliable and independent sources. For individuals this includes names, addresses, dates of birth and passport details. For corporate clients, firms must understand ownership structures, ultimate beneficial owners and the source of funds. This is essential for assessing the legitimacy of the entity and preventing the use of shell companies for illicit purposes.
Risk assessment is a cornerstone of the due diligence process. Clients are categorised according to their risk profile, which is influenced by factors such as geography, business type, ownership opacity or political exposure. High-risk clients, such as those from high-risk jurisdictions or politically exposed persons, require enhanced due diligence. This involves deeper checks, including obtaining additional information about their source of wealth and funds, conducting background screening and verifying the purpose of the business relationship. Enhanced scrutiny helps professionals identify cases where risk is elevated.
Crucially, CDD and KYC do not stop once onboarding is complete. Ongoing monitoring is required to identify changes in client behaviour or emerging red flags. This includes reviewing transactional activity for anomalies, updating client information and, where appropriate, filing suspicious activity reports. Professionals must be ready to pause or terminate relationships if evidence of illicit activity emerges. This continuous oversight is essential to maintaining a strong compliance posture.
Despite clear guidelines, gatekeeper professions often face notable challenges in complying with KYC and CDD requirements. The processes can be resource-intensive, particularly for smaller firms without dedicated compliance teams. Navigating client confidentiality in fields such as law can also be complex, especially in jurisdictions with strong privacy protections. The fragmented nature of international regulation adds a further layer of difficulty for firms operating across borders. Meanwhile, the consequences of non-compliance—ranging from significant financial penalties to reputational damage—reinforce the high stakes associated with these obligations.
To strengthen compliance, firms across gatekeeper industries are adopting best practices such as developing clear internal policies, offering regular training and investing in technology that automates identity verification and risk scoring. Maintaining constructive relationships with regulators and staying informed about policy changes also help firms remain compliant in a shifting landscape. These strategies allow professionals to uphold their regulatory responsibilities while reducing operational strain.
KYC and CDD have become fundamental tools in safeguarding financial systems from criminal misuse. For gatekeeper professions, these obligations are both a regulatory requirement and a critical component of ethical practice. While the challenges are significant, a proactive and technology-driven approach ensures professionals can confidently identify risk, maintain compliance and protect their organisations from harm. In an era of heightened regulatory scrutiny, strong due diligence frameworks are essential for preserving trust, transparency and financial system integrity.
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