CDD focuses on the nature and purpose of the customer relationship. This document explains how the business decides whether a customer is low, medium, or high risk. Risk factors may include customer type, location, products used, and expected transaction activity.
For example, a local retail customer making small payments is usually lower risk than a foreign company moving large sums daily. The CDD document explains how expected behavior is documented so unusual activity can later be detected.
CDD should also describe ongoing monitoring. Customer risk is not fixed. If a customer suddenly changes behavior, the document should explain when and how their risk level is reviewed.
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