CDD (Customer Due Diligence)
Customer Due Diligence is the baseline set of checks a regulated firm performs on every customer: verifying identity, understanding the purpose of the relationship, and assessing the risk they present. It is the standard tier of diligence, escalating to enhanced due diligence for higher-risk cases.
CDD applied inconsistently is a frequent finding in bank reviews, and a portfolio where roughly a fifth of files lack complete CDD can put the whole banking relationship under notice. Getting CDD right at onboarding is cheaper than remediating a back book under a regulator or bank deadline.
Know Your Customer is the process of verifying the identity of an individual customer: their name, address, date of birth, and identity documents, before and during a business relationship.
Enhanced Due Diligence is the deeper set of checks a firm applies to higher-risk customers: politically exposed persons, high-value clients, or those in high-risk jurisdictions.
Anti-Money Laundering is the framework of laws, controls, and monitoring a regulated firm must run to detect and prevent the movement of illicit funds.
Source of funds is the documented origin of the specific money moving through an account: where a given deposit or the working capital actually came from.