Customer Due Diligence is process which is collected information about customer. The organization recognizes its customers and reduces the risks to which it will be exposed. The most important of these risks is money laundering and financing of terrorism.
CDD requires knowing the customer and knowing their activities. It is a background process in accordance with the legislation.
So why is it necessary?
- To comply with legislation and regulations
- To make sure customers
- To prevent money laundering and terrorism financing
- For easier detection of unusual situations
- To prevent the organization from risking its business
There are many reasons such as these.
How to apply?
1- First, information about the customer is collected with the basic Customer Due Diligence. (Fullname, contact informations, place of birth and date of birth, nationality, maritial status etc.)
2- In case of doubt, scanning is performed to authenticate.
3- Customer activities are examined.
4- Enhanced Due Diligence is needed for higher risk customers.
5- Ongoing Check process continues as customer profiles may change.
Consequently, Customer Due Diligence processes have become an essential requirement for organizations to protect their business. Qualified experts should be involved in the process to avoid wasting time and resources.
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