Which of the following represents a reasonable approach for providing notice about identity verification at a financial institution?

• A. Provide no notice to customers to avoid friction.
• B. Publish all verification policies in a separate document.
• C. Provide clear notice about identity verification requirements.
• D. Offer verification only to new customers.

Answer: (C)

Notifying customers clearly about identity verification is essential to meet AML expectations and build trust. Regulators expect financial institutions to explain what verification steps are required, what documents will be needed, when verification happens (such as during onboarding or for certain activities), how the information will be used, and how long it will be retained. Providing clear notice helps customers prepare, reduces delays, and shows the institution is serious about compliance. The best approach is to give clear notice about identity verification requirements upfront and in an accessible way. Simply not informing customers creates confusion and regulatory risk, while burying all policies in a separate document or limiting verification only to new customers would fail to provide the necessary transparency and coverage.