What customer due diligence is

Customer due diligence (CDD), often called "know your customer" or KYC, means verifying the identity of a customer, and understanding the nature of their business relationship with you, before or during onboarding.

Standard due diligence

Verifying identity using reliable, independent documents or sources, understanding the purpose of the relationship, and, for a company, identifying who ultimately owns or controls it.

Enhanced due diligence

A higher level of scrutiny applied where the risk is greater, for example for politically exposed persons, customers connected to high-risk jurisdictions, or unusually complex ownership structures. This typically means gathering more information, understanding the source of funds and wealth in more depth, and more senior sign-off before proceeding.

Due diligence isn't a one-off box to tick at onboarding. It should be refreshed periodically and revisited whenever something about the relationship changes significantly.