What is Customer Due Diligence (CDD)?

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Customers are the foundation of any company. Without a comprehensive understanding of who your customers are, it’s hard to make informed decisions about how to grow — like who to target, what services to provide, and how to best provide these services.

While every business gathers some information about their customers, many do not take full advantage of the tools available, like know your client software. When you utilize the right tools in a public and private records database, you can gather comprehensive information on your customers and perform effective cdd customer due diligence

What is customer due diligence (CDD)?

Customer due diligence is when you perform due diligence research on your customers and gain information about them to help mitigate risk and make more informed decisions for growth. Customer due diligence involves performing real identity verification during onboarding and then continuously monitoring your customers throughout the entire customer lifecycle.

You may want to continuously monitor basic information such as customer relationships, customer locations with a home address lookup, or previous workplace records. You may also want to dive a little deeper and perform a personal background investigation to find criminal records or social media activity. When you do your customer due diligence, you’ll be able to understand your customers on a deeper level and gain information that can be used to reduce risk, maintain compliance, and boost growth. 

Who can benefit from customer due diligence (CDD)?

Performing customer due diligence can be hugely beneficial to any company with customers. If you work in the financial services industry, customer due diligence can be particularly beneficial because financial services tend to be higher risk and require knowing exactly who your customers are and what financial services they need. Some financial services businesses may even be required to perform customer due diligence by government agencies. 

Customer due diligence can also be beneficial to corporations who deal with sensitive information and transactions and need corporate risk solutions. However, any industry that has customers and is looking to gain more information about them can benefit from customer due diligence, including investigators, collections, legal professionals, government, insurance, or healthcare.

What does customer due diligence (CDD) solve?

Customer due diligence (CDD) can help businesses in a variety of different ways. Customer due diligence may be required to maintain compliance with legal or governmental regulations. For example, if you provide high-risk financial services and don’t do your customer due diligence, you may be held liable and face legal consequences if a customer commits a financial crime like fraud. 

Even if it’s not legally required, customer due diligence is still a great way to keep your company safe. It can be used as one of your financial risk assessment tools to identify higher risk customers for risk mitigation, as well as for a financial investigation agency to perform general investigations into customers. Another way customer due diligence can help make your company safer is by allowing you to better understand customer relationships — if certain customers are related to each other, you may want to keep a tighter watch on all of them at once to ensure there are no conflicts of interest or other problems. 

Customer due diligence can also help you build better relationships and grow your business. If your customers are other businesses or legal entities, customer due diligence can help you understand the individuals behind these accounts so you can facilitate more personal relationships with them and reach out directly if need be. 

When you learn more about who your current customers are and who is giving you a greater return on investment, you’re also able to identify better potential customers for list generation and implement more targeted marketing outreach campaigns, which will help you expand your customer base and grow your business.  Whether you’re using it for risk reduction or to grow your business, customer due diligence is a great solution for any business. 

What do I need to get started doing customer due diligence (CDD)?

To get started performing customer due diligence in your own company, use the tools available in a public and private records database like Tracers. Tracers pulls over 42 billions records from thousands of sources to provide you with the most comprehensive and up-to-date information available. 

You can gather information on customer locations using a basic address search, or even perform a utility search by address to find addresses of customers that may not show up in a traditional search. You can gather information about relatives, neighbors, and business associates, or perform a deeper dive into an individual’s online behaviors and associations using a social network lookup by name. You can also search criminal records and other financial records, like bankruptcy court records, to assess risk, or even look into a customer’s assets with an asset check.

Tracers provides numerous methods for collecting data for customer profile enrichment. You can use batch processing to perform high-volume searches for customer data at once, or use our API system to integrate our customer data directly into your own platform. Whatever kind of data you’re looking to gather on your customers for due diligence, Tracers is the easiest and most efficient way to get it. Get started today.