CUSTOMER DUE DILIGENCE (CDD)
Customer due diligence (CDD) is a process that collects relevant information about a customer and evaluates the information to determine the risk of money laundering, terrorist financing and other criminal activities to the financial institutions (FIs) and organizations.
Elements of a CDD program:
- Full identification of customer and business entities, including the source of funds and wealth when appropriate.
- Development of transaction and activity profiles of each customer’s anticipated activity
- Definition and acceptance of the customer in the context of specific products and services
- Assessment and grading of risks that the customer or the account present
- Account and transaction monitoring based on the risks presented
- Investigation and examination of unusual customer or account activity
- Documentation of findings.