CDD
Business & Finance abbreviation · Banking
| Stands for | Customer due diligence |
|---|---|
| Categories | Business & Finance |
CDD stands for Customer due diligence, a banking abbreviation.
Process of understanding a customer's identity, the nature and purpose of the relationship and its expected activity, so a bank can assess risk and spot unusual transactions. For business customers, it includes identifying beneficial owners.
Example: CDD for the new import company included collecting its ownership chart and expected monthly transaction volume.
Usage notes
The US FinCEN CDD rule, effective in 2018, requires banks to identify individuals owning 25 percent or more of a legal-entity customer and one person with significant control. CDD is risk-based, so higher-risk customers receive enhanced due diligence. EU anti-money laundering rules impose similar requirements.
Related abbreviations
More banking abbreviations
- BSA – Bank Secrecy Act
- BSB – Bank-State-Branch
- CAR – Capital adequacy ratio
- CASA – Current account and savings account
- CBDC – Central bank digital currency
- CD – Certificate of deposit
- CET1 – Common Equity Tier 1
- CFT – Countering the financing of terrorism
- CHAPS – Clearing House Automated Payment System
- CHIPS – Clearing House Interbank Payments System
- Chq – Cheque
- CIP – Customer identification program