Customer due diligence (CDD) is often defined as the first line of defence in the fight against money laundering (ML) and terrorist financing (TF). It is an integral part of the Know Your Customer (KYC) requirement, allowing companies to put together a detailed picture of the individuals and entities they are dealing with. It enables a firm to make decisions regarding its clients - both in terms of establishing new business relationships and retaining or maintaining existing ones, by gathering evidence to inform the question of whether a firm can - or should - engage with a client, based on numerous risk factors. In short, it is the process of understanding who your customers are and the nature of their business.
To understand more about what CDD best practice looks like, please read our Best Practice Guide.
Was this article helpful?
That’s Great!
Thank you for your feedback
Sorry! We couldn't be helpful
Thank you for your feedback
Feedback sent
We appreciate your effort and will try to fix the article