Customer due diligence (CDD) is a process of verifying the identity of a customer and assessing their risk level in order to mitigate potential risks, such as money laundering and financial crimes. It is an important part of the overall due diligence process in the world of money services businesses (MSBs).
To conduct CDD, MSBs may gather a variety of information and documents from the customer, such as:
- Government-issued identification, such as a passport or driver’s license
- Proof of address, such as a utility bill or bank statement
- Personal and financial information, such as employment history and financial statements
- Business documents, such as articles of incorporation or partnership agreements
This information is used to verify the customer’s identity and assess their risk level. MSBs may also conduct background checks and research the customer’s reputation in order to ensure that they are not involved in any illegal activities.
The specific procedure for conducting CDD will vary depending on the MSB and the regulations they are subject to. However, in general, the process may involve the following steps:
- Gathering and reviewing the necessary documentation from the customer.
- Verifying the customer’s identity and conducting background checks.
- Assessing the customer’s risk level and determining whether any additional due diligence is required.
- Documenting the results of the CDD process and keeping records for future reference.
The length of time it takes to conduct CDD will depend on the complexity of the case and the availability of the necessary documentation. It may take a few days to several weeks to complete the process.
This page was last updated on July 17, 2023.