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DEFINITION

Customer Due Diligence (CDD)

CDD is the process of identifying and verifying a client’s identity, assessing their source of funds and wealth, understanding the purpose of the business relationship, and evaluating the potential money laundering risks they pose.

In-depth guide on Customer Due Diligence (CDD).

Synonyms

Know Your Customer (KYC)

Acronyms

CDD

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Synonyms

Know Your Customer (KYC)

Acronyms

CDD

Examples

The bank collects identifying information, screens clients, and assesses their risk profile as part of its customer due diligence process.

FAQ

Minimum CDD includes identifying the client, verifying that identity, and understanding the purpose of the business relationship.

High-risk clients require enhanced due diligence with more detailed information collection and verification, and more frequent checks.

Ongoing CDD includes transaction monitoring and periodic KYC reviews to identify changes in client risk profiles over time.

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