Customer Due Diligence (CDD) is an essential piece of your overall BSA/AML/CFT Program. When we conduct a BSA/AML/CFT audit, we first look at whether you have written, risk-based procedures to assess the risk for each customer. Then, we determine if they are commensurate with your institution’s overall risk profile and whether they are sufficient to develop a customer risk profile. As you know, not all customers are created equal. For many, you will determine that they are very low risk. Others could be very high-risk. They key is that your CDD procedures are not only designed to detect this upfront but also to adjust with any changes to a customer’s risk profile.
Kevin explains more in the video.