Customer due diligence (CDD) is the process used by financial institutions to collect and evaluate relevant information about a customer or potential customer. It is a critical process in financial crime compliance, designed to assess and monitor the risks associated with potential and existing customers. It involves verifying the identity of customers, understanding the nature of their activities, and evaluating their potential risk of involvement in money laundering, terrorist financing, or other illicit activities. Key components of CDD include gathering and verifying customer information, such as identification documents and financial backgrounds, and ongoing monitoring to detect and report suspicious activities. Enhanced Due Diligence (EDD) may be applied to high-risk customers, requiring more in-depth investigation. Implementing robust CDD processes helps financial institutions comply with regulatory requirements, protect their reputation, and maintain the integrity of the financial system. By thoroughly understanding their customers, financial institutions can better prevent and mitigate financial crimes, ensuring a safer and more secure banking environment.