Customer Due Diligence (CDD)

Customer due diligence (CDD) is a process financial institutions and other organizations use to identify and assess the risks associated with a customer. The goal of CDD is to protect the institution from becoming involved in money laundering or terrorist financing.

There are a number of methods that can be used to conduct CDD, such as online searches and public databases. However, the most effective way to verify a customer’s identity is through personal contact. This can be done by meeting with the customer in person or contacting them by phone.

There are several steps in the CDD process. First, the institution must obtain identifying information about the customer, such as name, address, and date of birth. Next, the institution must verify the customer's identity. This can be done by comparing the identifying information against official documents such as a driver's license or passport. The institution must also conduct a risk assessment to identify any potential risks associated with doing business with the customer. This may include assessing the customer's credit history or looking for signs of money laundering or terrorist financing.