Know Your Customer (KYC) and Customer Due Diligence Services

Customers are required to undergo KYC and Customer Due Diligence Services checks when opening an account, sending or receiving money, buying a property or even applying for credit. These compliance checks are designed to prevent criminal activity like money laundering, fraud and terrorist financing.

While KYC processes involve verifying a customer’s identity, CDD goes further by assessing the risk associated with doing business with that customer or entity. The risk level is determined based on the customer’s risk profile and their relationship with the financial institution. This assessment includes identifying the customer, determining their ultimate beneficial owner, and understanding the nature and purpose of the business relationship. The risk assessment also takes into consideration the potential for evasion of sanctions and terrorist funding laws.

KYC and Customer Due Diligence Services: Strengthening Compliance

The information gathered during a CDD process is collected through various sources, including government-issued ID and other official documents. For companies, this can include certificates of incorporation or memoranda of association. CDD is an ongoing process that requires periodic reviews of a customer’s profile. High-risk and high-net-worth customers or transactions are subject to enhanced due diligence measures, which involve more rigorous scrutiny of their identities and transaction histories.

Fortunately, technology has made it easier than ever to conduct KYC and CDD. Software specializing in ID verification and AML screening can automate these in-depth checks for you, and reduce the friction of these processes for your customers. This is especially true if you choose a solution that allows your customers to upload the required information online.

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