What is customer due diligence process?

What is customer due diligence process?

Customer due diligence is the processes used by financial institutions to collect and evaluate relevant information about a customer or potential customer.

What is CDD procedure?

Customer Due Diligence (CDD) is the control procedure that companies apply while making risk assessments. Some of the risks firms face are money laundering, terrorist financing, and other financial crimes. CDD procedures have to be applied by organizations under AML liability.

What is CDD in KYC process?

Customer due diligence (CDD) is the act of performing background checks and other screening on the customer to ensure that they are properly risk-assessed before being onboarded. CDD is at the heart of Anti-Money Laundering (AML) and Know Your Customer (KYC) initiatives.

What are the three 3 steps in the ML process?

The process of laundering money typically involves three steps: placement, layering, and integration.

Is CDD part of BSA?

The cornerstone of a strong BSA/AML compliance program is the adoption and implementation of risk-based CDD policies, procedures, and processes for all customers, particularly those that present a higher risk for money laundering and terrorist financing.

What is CDD checklist?

The CDD measures to be taken are as follows: (a) Identifying the customer and verifying that customer’s identity using reliable, independent source documents, data or information. (c) Understanding and obtaining information on the purpose and intended nature of the business relationship.

What is the difference between KYC and CDD?

The main difference between KYC and CDD is that apart from the emphasis on financing, CDD controls are carried out in a process, and communication with the customer continues. Customer Due Diligence is a form of “Know Your Customer” inventory. KYC assists the CDD in verifying the information provided by customers.

What are the three elements of customer due diligence?

The CDD Rule includes four core elements of customer due diligence, each of which should be included in the anti-money-laundering (AML) program of a CFI: (1) customer identification and verification, (2) beneficial ownership identification and verification, (3) understanding the nature and purpose of customer …

What is the difference between CDD and EDD?

The main difference between Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) is that Customer Due Diligence (CDD) remains a less strict customer verification process as it only requires id information, address and assesses the risk category of the customer.

What is simplified due diligence?

Simplified due diligence is permitted where you determine that the business relationship or transaction presents a low risk of money laundering or terrorist financing, taking into account your risk assessment.