KYC and CDD: What do you need to know?
Verifying the identities of clients and thoroughly investigating potential business partners and investments are essential steps for any business.
Known as Know-Your-Client (KYC) and Client Due Diligence (CDD), these processes are designed to ensure the legitimacy of clients and business partners and protect the company from potential risks.
Through KYC, businesses verify the identities of their clients to make sure they are who they say they are.
CDD, on the other hand, requires companies to take a deeper look into potential business partners or investments to ensure they are legitimate and reliable.
Why is it important?
Gaining an understanding of your client allows you to respond to their needs in a swift and effective manner.
Additionally, CDD is a large contributor to anti-money laundering, helping to prevent terrorist financiers and other criminals from exploiting your business.
Be mindful that you may face significant financial impact from fines, imprisonment, and reputational damage if guidelines are not adhered to.
What do the checks include?
Minimum CDD includes checking clients against prohibited lists (PEPs and sanctions), as well as capturing and verifying details, such as:
- Full name
- Residential address
- Date of birth
- Photo ID
Who is CDD relevant to?
In the past, CDD only encompassed financial services, but the scope has now been expanded to other regulated sectors.
As of late, this has also included unregulated sectors, such as cryptocurrencies and art.
How can we help?
At FibreCRM, our KYC Due Diligence component offers:
- KYC forms per entity type
- Adverse media checks
- Conflict checks
- UBO management
- MLRO & partner sign-off
We have a unique understanding of the needs of accountants, and our onboarding and client management solutions have been developed specifically to make accountants’ lives easier.