A beneficial owner of a [[Legal Entity | legal entity]] is an individual or group who ultimately owns and controls the entity, either directly or indirectly, through legal arrangements. The beneficial owner is the ultimate recipient of financial benefits from the entity, rather than the legal owners on paper. Banks are required to monitor beneficial owners and must follow guidelines established by the [[Financial Action Task Force (FATF)]] and other international organizations. Banks must collect and verify information about the ultimate beneficial owners of their customers’ accounts. Bank's normally must identify any beneficial owner with **20%** or greater of an interest in a [[Legal Entity | legal entity.]] This includes conducting customer due diligence (CDD), which includes identifying the customer, evaluating the customer's risk profile, and understanding the purpose and intended nature of the business relationship. Banks must also take reasonable steps to determine whether a customer is acting on behalf of another person. If a customer is acting on behalf of another person, then banks must identify and verify the identity of that beneficial owner.