Video on Key Components of Customer Due Diligence
Video on Key Components of Customer Due Diligence
When it comes to AML CFT, customer due diligence is a crucial element. Customer due diligence is a process of identifying the customers, verifying their identity, and evaluating the potential risk a customer may pose to the business before establishing a business relationship and onboarding such a customer.
CDD process aims to determine whether the business is vulnerable to financial crime risks when dealing with a person and what controls must be deployed to mitigate such risks.
The key components of Customer Due Diligence are as follows:
- KYC (Know Your Customer)
- Name Screening
- Customer Risk Assessment
- Enhanced Due Diligence
- Ongoing Monitoring
Customer due diligence is usually a pre-customer onboarding activity, followed by a regular review to ensure the customer’s original risk assessment remains valid. By applying Customer due diligence effectively, it can serve as a critical tool to protect businesses from financial criminals.
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