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Due Diligence

Customer Due Diligence (CDD)

Customer Due Diligence (CDD) is the set of risk-based checks a regulated firm performs to identify and verify a customer, understand the nature of the relationship, and assess the money-laundering and terrorist-financing risk the customer presents.
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CDD sits at the heart of the risk-based approach to AML. Standard CDD applies to most customers; Simplified Due Diligence (SDD) may apply to demonstrably low-risk cases; and Enhanced Due Diligence (EDD) is required for higher-risk customers such as PEPs or those in high-risk jurisdictions.

Effective CDD is not a one-time event. Firms must keep customer information current and apply ongoing monitoring throughout the relationship so that changes in risk — a new sanctions designation, adverse media, or a shift in transaction behaviour — trigger appropriate review.

Key points

  • Three tiers: Simplified, Standard, and Enhanced Due Diligence
  • Calibrated to customer, product, and jurisdiction risk
  • Requires ongoing monitoring, not just onboarding checks
  • Documented and auditable to satisfy regulatory inspection

How One Constellation helps

A configurable, multi-factor risk matrix that assigns the right level of due diligence to every customer automatically.

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Frequently asked

When is Enhanced Due Diligence required?+
EDD is required whenever a customer presents higher risk — for example PEPs, customers in high-risk jurisdictions, complex ownership structures, or unusually large or unexplained transactions.

Compliance, Intelligently Automated

From KYC and KYB to sanctions screening and transaction monitoring — One Constellation unifies your entire compliance lifecycle in one platform.

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