Customer Due Diligence is identifying who your customer is and verifying the customer's identity on the basis of documents, data or information obtained from a reliable and independent source. This means verifying various information such as your customer’s:
The process of Customer Due Diligence is a key part of Know Your Customer (KYC).
In today's heavily regulated markets it is more important than ever to have an accurate view of who your clients are. Identifying them accurately at an early stage can ensure your organisation doesn't lose money through fraud or is fined by regulators for breaches of practice. The main benefit of CDD is therefore assessing how much risk a customer might pose by working with them possibly due to reasons such as links to money laundering and terrorism.