CDD - Customer Due Diligence

ChatGPT said:

CDD – Customer Due Diligence

Definition
Customer Due Diligence (CDD) is the structured assessment of a client’s risk profile based on verified identity, ownership, activities, and behaviour. It determines the depth of checks and monitoring a bank must apply to manage financial crime, sanctions, and reputational risk in accordance with regulatory standards.

Context
CDD extends beyond KYC. While KYC establishes who the client is and why the relationship exists, CDD determines how much risk that relationship represents and how it should be managed over time. CDD classifies clients into risk tiers (typically Low, Medium, or High), drives the required level of due diligence (Standard or Enhanced), and sets periodic review cycles.

Within E-CLM, CDD is an embedded service that consumes verified client data from Entity Management and applies rule-based assessments to maintain an accurate risk profile throughout the client lifecycle. It provides a direct control linkage between onboarding, review, and offboarding processes.

In CNRM, aggregated CDD outputs inform network-level risk analytics—showing where concentrations or contagion may occur across related clients, geographies, or sectors.