Customer Due Diligence (CDD)
Gathering information to assess a customer's risk profile when onboarding.
Detailed Description
Customer Due Diligence (CDD)
What is the primary objective of Customer Due Diligence (CDD)?
The primary objective of CDD is to assess the risk each customer poses in terms of potential involvement in money laundering, terrorist financing, or other illicit activities.
What are the three types of Customer Due Diligence?
The three types of CDD are Standard Due Diligence, Enhanced Due Diligence (EDD), and Simplified Due Diligence (SDD).
Why is ongoing monitoring important in CDD?
Ongoing monitoring is essential to detect any unusual or suspicious activities that could indicate illicit behavior.
What are some risks of non-compliance with CDD measures?
Risks include legal penalties, reputational damage, and increased vulnerability to facilitating money laundering or other illegal activities.
What is a best practice for implementing CDD?
A best practice is to develop a comprehensive CDD policy that outlines the CDD process, including roles and responsibilities.