What is customer due diligence (CDD)?
Customer due diligence (CDD) is the process financial institutions use to understand a customer's identity, beneficial ownership, and the purpose of the relationship, and to monitor activity on an ongoing basis. It is an evidence workflow rather than a one-time search: strong programs document sources, dates, limitations, and the reasoning used to clear or escalate a record.
Full name: Third-Party and KYC Due Diligence
Short explanation
In a third-party or KYC context, due diligence means collecting and assessing enough information to understand the counterparty, the purpose of the relationship, ownership and control, sanctions or exclusion exposure, and changes over time. It is an evidence workflow, not a one-time search. Strong programs preserve sources, dates, limitations, and the reasoning used to clear or escalate a record.
Related use case: Exclusion & sanctions screening
How it’s used
- KYC programs: financial institutions use customer due diligence to understand customer identity, beneficial ownership, relationship purpose, and monitoring needs.
- Vendor screening: procurement and compliance teams check sanctions, exclusions, corporate registries, and ownership records before and during a relationship.
- Fonteum supports due diligence by preserving source, date, limitation, and identity-resolution context for each public-record fact it displays.
Frequently asked questions
- What does due diligence mean in KYC?
- It means collecting and assessing information about a customer, ownership, relationship purpose, and ongoing activity so a firm can understand and monitor the relationship.
- What is third-party due diligence?
- Third-party due diligence is the process of checking vendors, contractors, suppliers, or partners against public records and internal requirements before and during a business relationship.
- Is due diligence a one-time lookup?
- No. It usually includes onboarding checks, documented decisions, periodic refreshes, and event-driven follow-up when a source record changes.
Explore in Fonteum
How Fonteum sources, resolves, and publishes data tied to this term.