- Opening bank accounts
- AML consulting
- Business support
- Сompanies for sale
The procedures Know Your Customer and Customer Due Diligence can seem similar at a first glance. Nevertheless, we can spot differences between them. KYC aims at creating a risk profile of a customer: before starting any kind of business relationship, it is useful to retrieve the customer’s information. Alternatively, CDD is a way of confirming that the customer’s data is truthful and correct. In addition, CDD consists of background and utility ownership checking.
To define the main difference, KYC puts emphasis on financing. CDD also includes the financial part, but it generally is carried out in a continuous way. It represents a continuous framework of assurance serving especially organizations that have numerous transactions on daily basis as for example real estate companies or banks. Institutions like these use advanced programs that are set to monitor moves of funds in order to identify suspicious transactions. Thus a well-processed KYC can serve as a great basis for maintaining quality CDD, and altogether they can guarantee that the institutional systems are not being misused for money laundering purposes.
Nowadays, Customer Due Diligence is a crucial part of the AML routine. It is regularly performed in certain time intervals. The check-ups include control of geographical distribution, amount of money, or transaction volume. In our modern age, the software runs the monitoring automatically, However, the automated systems must be updated regularly.
It is interesting to mention that previously used KYC procedures were considered not effective enough, which is why those procedures have turned into automated CDD applications. This novelty helps to reassure CDD during the whole business relationship. This is vital because a customer’s risk profile can change drastically over time.
In COREDO we assist our clients with creating risk profiles, compounding CDD and KYC. Write us a quick message and get your free consultation.