Why choose a career in KYC/CDD (2024)

CDD, or Customer Due Diligence, is the process by which an organisation learns about a customer to assess the potential risks posed by a new relationship, or any changes in those risks within an established relationship.

The information gathered and assessed will include confirmation of a client's identity, as well as understanding where their money comes from, the basis of any financial transactions that will pass through the account, which countries and activities they participate in, and more.

Collecting, evaluating and risk rating this information enables an organisation to comply with legal requirements to help prevent money laundering, tax evasion, and identity theft; to protect itself and its shareholders from reputational risk; and potentially to help legal enforcement agencies.

Yes. All customers will go through a form of CDD, but the level of information sought will differ depending on the level of risk in the relationship. Jurisdiction, type of account, products used, industry – many factors influence the appropriate level of CDD.

A simple retail banking account with an employed teacher in a state school will, for example, pose a lesser risk than an international company operating in several countries, using products to support international trade. A sole trader running a painting and decorating business would typically be viewed as a lesser risk than a public figure who is responsible for deciding how public funds are allocated and who is, therefore, a potential target for bribery and corruption.

Many institutions conduct customer due diligence, and not all are in financial services.

Banks, building societies, funds, brokers, and many more businesses must conduct CDD on their new and existing relationships. Typically, an entry-level role may look for knowledge of financial concepts, attention to detail, and evidence of a desire to learn, based on formal exam qualifications or progress within a previous job role.

There is a growing area of business interest in CDD – requirements regarding green credentials, investigation of supply chains, and ever-growing potential exposure to sanctions mean that more businesses find a formal due diligence process to be necessary.

As a CDD analyst, you would be looking to build a picture of the customer, intending to be confident of their identity and to make sense of their accounts and how they use them.

If you are working in the corporate sector, therefore, you must understand things like company structures and decision-making processes. You will also need to gain information about where people live and how they structure their money if they are private individuals. Developing this knowledge will allow you to anticipate whether a potential new account contains unacceptable financial crime risks, and to interpret criminal activity against the background of how a legitimate account would behave.

Building this picture requires research. Sometimes, it is possible to use the information provided by the customer and what is readily available in the public domain; however, more specialist tools and sources are required, and cases require detailed investigation.

There is variety in terms of the type and level of CDD performed, based upon the sector in which the analyst works and the level of risk the institution is willing to accept.