From the course: The ABCs of the Banking and Insurance Business: AML, KYC, the NAIC, IFRS, and More

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Customer due diligence (CDD)

Customer due diligence (CDD)

From the course: The ABCs of the Banking and Insurance Business: AML, KYC, the NAIC, IFRS, and More

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Customer due diligence (CDD)

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- [Narrator] Customer due diligence, or CDD, is a critical process that ensures banks know their customers, manage risks, and comply with anti-money laundering, or AML regulations. At its core, customer due diligence involves identifying and verifying the identity of a customer. This is also known as Know Your Customer, or KYC. KYC ensures that the person opening an account is who they claim to be. This helps banks prevent illegal activities like money laundering, terrorism financing, and identity theft. The basic steps of KYC include collecting personal information, such as name, date of birth, and address, verifying that identity using government-issued identification or other reliable documents, and understanding the purpose of the account, that is what the customer will be using it for, and the expected activity in that account. These steps help banks create a customer profile and set a baseline for monitoring transactions. For higher risk customers, banks must go a step further…

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