Challenges in Conducting Customer Due Diligence

Customer Due Diligence (CDD) is a process that involves identifying potential customers, whether they are natural persons or legal entities, checking their authenticity and legitimacy and identifying the degree of money laundering (ML), financing of terrorism (FT), or proliferation financing (PF) risk each customer poses to the business. 

Businesses must design an Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) and Targeted Financial Sanctions (TFS) framework, detailing how they intend to carry out their CDD obligations, that is, by having in place relevant policies, procedures, systems, and controls to undertake CDD measures.  

CDD is a key element of the AML/CFT framework; businesses must be aware of certain common challenges faced during the formulation and implementation of the CDD process.  

Some of these challenges are elaborated on in the video, such as:  

• Complex and Complicated Process  

• Resource and Cost Intensive 

• Time Taking Process  

• Dependency on Third Party  

• Lack of Expertise and Knowledge 

• Customer Resistance due to Privacy Concerns  

This video highlights and discusses various challenges in conducting CDD.