CAMS · Question #199
What are three elements of a sound Customer Due Diligence Program?
The correct answer is A. Determination of what type of customer the financial institution will accept B. Training as to how and to what extent to identify prospective customers C. Obtaining date of birth and address of a prospective customer. A sound Customer Due Diligence (CDD) program is built on defining acceptable customer types, training staff on identification procedures, and collecting core identifying information such as date of birth and address.
Question
What are three elements of a sound Customer Due Diligence Program?
Options
- ADetermination of what type of customer the financial institution will accept
- BTraining as to how and to what extent to identify prospective customers
- CObtaining date of birth and address of a prospective customer
- DDetermination of who in the institution should be assigned to the prospective customer as a
How the community answered
(64 responses)- A81% (52)
- D19% (12)
Why each option
A sound Customer Due Diligence (CDD) program is built on defining acceptable customer types, training staff on identification procedures, and collecting core identifying information such as date of birth and address.
Defining the types of customers the institution will accept is a foundational CDD element that establishes acceptable risk profiles and sets the scope of the program.
Training staff on how and to what extent to identify prospective customers ensures consistent and compliant application of CDD procedures across the institution.
Collecting identifying details such as date of birth and address is a core Know Your Customer (KYC) requirement and a direct component of the customer identification process within any CDD framework.
Assigning a specific staff member to a prospective customer is a relationship management practice, not a defined programmatic element of a Customer Due Diligence program.
Concept tested: Core elements of a Customer Due Diligence program
Source: https://www.fatf-gafi.org/en/publications/Fatfrecommendations/Fatf-recommendations.html
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