Source of Funds and Source of Wealth

Understanding where a customer’s money comes from is a central part of effective customer due diligence and financial crime risk management. However, source-of-funds and source-of-wealth enquiries are often confused, applied inconsistently or treated as document-collection exercises.

Source of funds concerns the immediate origin of the money or assets involved in a particular transaction or business relationship. Source of wealth concerns how a person accumulated their overall wealth over time. Although connected, the two concepts answer different questions and may require different information and evidence.

This course provides a practical framework for obtaining, assessing and, where appropriate, verifying source-of-funds and source-of-wealth information. It explains how to evaluate whether a customer’s explanation is specific, plausible and consistent with the customer’s known circumstances and expected activity.

The course also considers how source enquiries should be applied within South Africa’s risk-based regulatory environment. It examines customer due diligence, ongoing monitoring, higher-risk relationships, politically exposed persons, third-party funding, legal persons, trusts and beneficial owners. Particular attention is given to avoiding rigid, checklist-based decisions and applying proportionate measures based on the circumstances and identified risk.

Through practical examples and scenario-based questions, learners will consider how to:

• distinguish source of funds from source of wealth;
• identify the money or wealth that requires assessment;
• obtain clear and relevant information from customers;
• determine when verification is necessary;
• select evidence appropriate to the stated source;
• assess consistency, credibility and economic plausibility;
• recognise warning signs and unresolved inconsistencies;
• manage complex and higher-risk arrangements;
• document decisions and maintain a defensible audit trail;
• escalate concerns without automatically assuming criminal activity; and
• support effective governance and ongoing control.

The course is divided into five modules:

• Understanding Source of Funds and Source of Wealth
• Establishing and Verifying Source of Funds
• Establishing and Verifying Source of Wealth
• Risk Assessment, Warning Signs and Escalation
• Operational Application and Ongoing Management

This course is suitable for employees and decision-makers involved in customer due diligence, financial crime prevention and customer-risk management, including:

• customer onboarding and client take-on teams;
• know-your-customer and customer due diligence analysts;
• anti-money laundering and financial crime practitioners;
• compliance and risk professionals;
• transaction-monitoring and investigation teams;
• money laundering reporting officers;
• relationship managers and customer-facing employees;
• legal, governance and internal-control professionals;
• quality-assurance and internal-audit teams;
• supervisors, managers and senior decision-makers responsible for higher-risk customers; and
• employees of accountable institutions and designated non-financial businesses and professions.

The course is particularly relevant to banks, other financial institutions, fintechs, payment service providers, legal practitioners, trust and company service providers, estate agents or property practitioners, accountants, dealers in high-value goods and other organisations that may need to understand and evaluate the origin of customer funds or wealth.

By the end of the course, learners should be able to approach source enquiries as a connected decision-making process rather than a request for a standard set of documents. They should be able to identify what needs to be understood, assess whether the available information supports the explanation and determine whether the matter can be accepted, requires further enquiry or should be escalated.

The ultimate objective is to help institutions make consistent, proportionate and defensible decisions while identifying situations in which funds or wealth may be connected to unlawful activity.