How To Carry Out Standard Customer Due Diligence | tic company (2024)

FAQs

How To Carry Out Standard Customer Due Diligence | tic company? ›

Customer due diligence (CDD) is the act of performing background checks and other screening on the customer to ensure that they are properly risk-assessed before being onboarded. CDD is at the heart of Anti-Money Laundering (AML) and Know Your Customer (KYC) initiatives.

Customer due diligence (CDD) is the act of performing background checks and other screening on the customer to ensure that they are properly risk-assessed before being onboarded. CDD is at the heart of Anti-Money Laundering (AML) and Know Your Customer (KYC) initiatives.

CDD consists of performing background checks, and screening potential and existing customers to ensure they're not involved in illegal activity. At a minimum, CDD checks include verifying a customer's name, address, date of birth and photo ID and screening them to ensure they're not on prohibited lists.

Customer identification and verification. Understanding the nature and purpose of the business-customer relationship. Beneficial ownership identification and verification. Ongoing monitoring for suspicious activities.

The CDD process involves four stages, including establishing customer identities, performing risk assessments, collecting additional information, and reporting suspicious activities.

Due diligence is defined as an investigation of a potential investment (such as a stock) or product to confirm all facts. These facts can include such items as reviewing all financial records, past company performance, plus anything else deemed material.

What is the standard CDD? ›

Standard CDD

For individual customers and beneficial owners, at a minimum you must identify and have on record the person's: Full name. National Registration Identity Card (NRIC) / passport number / reference number of any other official document. Residential and mailing address.

Other examples of hard due diligence activities include: Reviewing and auditing financial statements. Scrutinizing projections for future performance. Analyzing the consumer market.

There are three levels of customer due diligence: standard, simplified, and enhanced.

Standard due diligence requires you to identify your customer and verify their identity. There is also a requirement to gather information to enable you to understand the nature of the business relationship.

Customer Due Diligence (CDD) checks are systematic procedures employed by businesses, particularly in the financial sector, to confirm the identity, background, and risk profile of customers.

Below, we take a closer look at the three elements that comprise human rights due diligence – identify and assess, prevent and mitigate and account –, quoting from the Guiding Principles.

The CDD Rule has four core requirements. It requires covered financial institutions to establish and maintain written policies and procedures that are reasonably designed to: identify and verify the identity of customers. identify and verify the identity of the beneficial owners of companies opening accounts.

How to check customer due diligence? ›

The due diligence in business circ*mstances refers to organizations practicing prudence by carefully assessing associated costs and risks prior to completing transactions. Examples include purchasing new property or equipment, implementing new business information systems, or integrating with another firm.