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Compliance – Why Customer Due Diligence is of paramount importance for your company

Updated: Feb 24, 2022

When it comes to Financial Crime Compliance (FCC), customer due diligence (CDD) is one of the most important and complex parts of the KYC (Know Your Customer).

What is Customer Due Diligence?

Financial institutions use a series of processes for collecting and evaluating specific information about customers; this relevant information is known as Customer Due Diligence.

CDD aims to uncover the potential risks that the business is facing or may face in the future. Information about CDD is gathered from a variety of sources. Below are the sources through which information about CDD is gathered:

1. From the customers, these customers provide the information for doing the business with financial institutes

2. Company listing or other public data sources

3. Sanction Lists issued by the officials

4. Third-party

If you want to know the customer standards, then Customer due diligence plays a vital role. The information is not specific, and it varies from area to area.

Why is Customer Due Diligence Important for the Business?

There are several reasons why CDD is important for any business. The most important reason is that through CDD, you will know and understand your customers.

Below are the other important factors why CDD is important for any business:

  • To make sure that the customer is running their business according to the laws and rules of the area where it is running from

  • The information against the customer being checked is valid

  • Protecting the business from any scam or fraud

  • CDD helps in protecting the business against any potential risks.

  • CDD provides all relevant information to their clients so it makes it easy for the business to choose the best option.

What you get from CDD

Through CDD, you will get the name, addresses, photos and other relevant information about the client that will help you get secure from any scam.

There are many other issues that a business may face. To overcome such issues, CDD plays a very important role. CDD also helps to getting rid of fake transactions, money laundering, etc. The more information you will get, the safer it will be to overcome the issues that a business may face.

Dashro Solutions links to APIs to easily get information on customers. We use CreditSafe and Dow Jones APIs to get miliions of customer information at a touch of a button. Talk to us to understnd more about how we can help to protect your business.


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