Customer due diligence (CDD) is a process that financial institutions and other regulated companies use to identify and verify the identity of their clients and assess their potential money laundering or terrorist financing risks. It is a key element of a company’s anti-money laundering (AML) compliance program.
CDD typically involves collecting and analyzing information about the customer, such as their name, address, date of birth, and identification documents. The company may also seek to understand the customer’s business or occupation, the source of their funds, and the purpose of the business relationship.
In addition to collecting this information, the company may also perform additional checks, such as reviewing public records or conducting internet searches, to verify the accuracy of the information provided and to assess the customer’s risk profile.
CDD is an ongoing process, and companies are required to update and refresh their customer information on a regular basis. The specifics of the CDD process may vary depending on the company’s business model, the type of customer, and the level of risk involved.
This page was last updated on January 3, 2023.