Video on Decoding the types of Customer Due Diligence

Video on Decoding the types of Customer Due Diligence

Customer Due Diligence becomes inevitable at the time of entering a business relationship with a customer by the Financial Institutions, DNFBPs, and VASPs. It is a very crucial process and needs to be performed with caution and utmost efficiency.

This video explains three types of Customer Due Diligence measures:

  • Simplified Due Diligence: When the risk posed by a particular customer is classified as low, then Simplified Due Diligence must be applied.
  • Standard Due Diligence: When risk posed is classified as medium or when the simplified Due Diligence outcome is not satisfactory.
  • Enhanced Due Diligence: When, after conducting a customer risk assessment, the customer is classified as high-risk, then Enhanced Due Diligence must be carried out.

Implementing the risk-based approach to conduct Customer Due Diligence measures helps identify red flags early and saves an organisation from entering into a wrongful transaction and business relationship.

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