What is Customer Due Diligence (CDD)?

Customer Due Diligence (CDD) is the process of gathering and verifying information about a customer to assess the risk they pose to a business. It is a cornerstone of Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.

The primary goal of CDD is to ensure that businesses know exactly who they are dealing with, allowing them to detect and prevent financial crimes such as money laundering, fraud, and terrorism financing. CDD is typically required during the onboarding process and whenever there is a significant change in the customer's risk profile or transaction behavior.

There are different levels of CDD depending on the risk level: Simplified Due Diligence (SDD) for low-risk customers, Standard Due Diligence for most users, and Enhanced Due Diligence (EDD) for high-risk individuals or entities.