Customer Due Diligence is the process of identifying customers and clients to check they are who they say they are.
To perform customer due diligence - also known as Know Your Customer (KYC) checks - firms must identify the client and then verify they are who they are claiming to be. This process involves obtaining details about the individual, including their name, photograph, address and date of birth. This is usually done by gaining access to identification documents such as passports, driving licenses and utility bills.
When completing Customer Due Diligence on businesses, this will involve checking the company is registered with Companies House, identifying Persons of Significant Control (PSCs), officers and Ultimate Beneficial Owners, as well as looking at the company's annual returns and statements.
Most firms still complete their Customer Due Diligence manually, i.e. by checking passports and other identification documents to verify the person’s name, address and date of birth and then checking that person’s details against Sanctions and PEP lists.
However, manual checks are open to errors, as passports and other documents can be easily forged.
Electronic verification is the most reliable way to complete AML checks as it cross-checks a person’s details using multiple data platforms, as well as screening for Sanctions and PEPs. If the documents or details provided are fake, electronic verification will expose this.
SmartSearch is a unique AML, fraud prevention and Know Your Customer / due diligence platform which incorporates fully automated Sanction, PEP, SIP and RCA screening, offering a ‘one-stop-shop’ to verify individuals and businesses. The platform also offers daily monitoring to ensure all client firms remain fully compliant and protected for the life of their contract.