CDD
Customer Due Diligence
Definition
The process financial institutions use to collect and evaluate information about a customer to assess the risk they pose for money laundering or terrorist financing. CDD includes verifying identity, identifying beneficial owners, and understanding the purpose of the business relationship.
Regulatory Context
Required under FATF Recommendation 10 and implemented across jurisdictions. The level of CDD applied should be commensurate with the risk profile of the customer, ranging from simplified to enhanced measures.