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CDD – Customer Due Diligence And Automation

by | Jul 6, 2021 | Anti Money Laundering (AML), Financial Crime Academy

Did you know that a survey found that 48% of interviewed banks noted that customer due diligence regulations were some of their biggest challenges? Based on this information, a weak program is going to have consequences for your AML program. When using manual processes, it can be tough to meet all regulatory expectations regarding customer due diligence. Manual processes are often inconsistent and lack complete customer transparency, posing some additional regulatory risks for businesses. Insufficient control over a program can lead to decreased customer satisfaction and potential financial consequences; two things businesses aim to avoid.

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Key Takeaways

  • AML programs spend a lot of their time focusing on customer due diligence and knowing your customer protocols.
  • If financial corporations fail to comply with these regulations, they can face loss of customers and monetary consequences (i.e., regulatory fines).
  • Automated, technology-based AML processes decrease the possibility of error and save time and money.
customer due diligence

Customer Due Diligence Technical Advantages To Financial Crime

The solution to avoiding potential fallbacks is to use CDD and KYC protocols to your advantage. By using technology-based, automated processes, these programs are up-to-date and provide customer risk coverage. This means these CDD AML procedures account for ongoing due diligence and enhanced due diligence processes.

Using these automated procedures, financial corporations can enhance customer risk profiles using the latest technology from various external data sources. This integration of information allows organizations to quickly and efficiently identify and manage threats throughout the client duration. In addition, customer satisfaction is not compromised in the meantime.

Machine learning, AI, and automation have been combined to create excellent CDD and KYC procedures to create comprehensive views of customer risk. CDD and KYC due diligence solutions can include:

  • An adaptable platform that works with unique requirements across industries and nations.
  • Cohesive access to various external information bases to enhance customer risk profiles.
  • Comprehensive, visual views of risk to limit time and resources spent by analysts.
  • Automated customer risk scores for accurate management.
  • Simulation for more straightforward analysis.

Summary

In all, automated and technology-based AML customer due diligence saves businesses time, money, and stress. By using machine learning and AI to generate AML protocols, there is less worry about false alarms or unidentified threats.

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