What is due due diligence?

What Is Due Diligence? Due diligence is an investigation, audit, or review performed to confirm facts or details of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party.

What is an example of due diligence?

Due Diligence Examples A business exhaustively examining another to determine whether it is a sound investment prior to initiating a merger. Consumers reading reviews online prior to purchasing an item or service. People checking their bank accounts and credit cards frequently to ensure that there is no unusual …

Why is CDD needed?

The application of customer due diligence is required when a firm that is covered by money laundering regulations enters into a business relationship with a customer or a potential customer. This includes occasional one-off transactions even though this may not constitute an actual business relationship.

What is due diligence and why is IT important?

Due diligence is essentially an investigation to target any risk from a legal perspective. This process occurs before acquiring a business or company. The purpose is to have knowledge of the risks prior to purchase. For example, when purchasing a real property, it is important to know who the legal owner is.

What is customer due diligence?

Customer due diligence is the processes used by financial institutions to collect and evaluate relevant information about a customer or potential customer.

What is the difference between KYC and CDD?

KYC checks are therefore made at the early stage of establishing business relationships, when we screen potential customers, while Customer Due Diligence (CDD) is an ongoing monitoring of suspicious activities aimed at money laundering and both are a crucial part of an anti-money laundering (AML) program.

What is CDD and KYC?

An integrated approach to critical Know Your Customer (KYC) and Customer Due Diligence (CDD) workflows can improve visibility into potential risks associated with financial crimes like money laundering and terrorist financing while providing valuable insight into customer life events and changes.