Customer Due Diligence (CDD) Course Overview

Customer Due Diligence (CDD) is one of the main work streams in Transaction Monitoring.

Financial institutions and some companies are not required to conduct investigations for the purpose of identifying and verifying the customer.

The purpose of CDD investigation is to provide a risk rating for only a few selected customers of the mandatory institution.

Law firms are not subject to Act on the prevention of money laundering and financing of terrorism.

CDD analyst's workflows mainly focus on understanding customer behavior and preferences.

Transaction Monitoring is covered in the same course where CDD topics are discussed.

A simplified client due diligence is a more extensive process that includes verifying the origin of the client's assets.

An example of a simplified investigation could be a computer store operating in multiple countries.

Standard due diligence investigations are conducted to determine if the client poses a high, medium, or low risk.

Enhanced Due Diligence investigations are typically conducted on clients who present lower risks such as small local businesses.

Heightened scrutiny in Enhanced Due Diligence involves taking additional measures to understand client risks and manage them effectively.

An oil storage company operating solely within Europe is an example of a situation that might require an Enhanced Due Diligence investigation.

A Customer Due Diligence analyst is responsible for collecting customer information and communicating only with the customer directly.

Onboarding is the first investigation conducted in Customer Due Diligence to assess integrity risks of a customer before purchasing products and services.

An Event Driven Review is a process triggered by signals that always indicate an increased risk associated with a customer.

The duties of the client exit officer include transferring the money of the customer to another account if the risk level is too high.

In Customer Due Diligence, there are three types of investigation: Simple, standard, and moderate Due Diligence.

The Periodic Review in CDD involves re-investigating the client in a frequent period based on the assigned risk rating.

The committee where decisions about possible client departure or measures are made is called CRAC, which stands for Client Risk Assessment Committee.

Transaction Monitoring can initiate an Event Driven Review when unusual transactions are detected.

Enhanced Due Diligence is another term for Onboarding in Customer Due Diligence investigations.

Customer exit generally involves a larger department compared to other work streams in Customer Due Diligence.