Guide
What is customer due diligence (CDD)?
Last updated 8 September 2026
Customer due diligence (CDD) is the process of identifying and verifying who your customer is, and understanding your relationship with them, before and while you provide a designated service. How much you do depends on the risk.
Initial vs ongoing CDD
Initial CDD happens before you provide a designated service: you identify the customer and verify their identity on reasonable grounds. Ongoing CDD continues through the relationship: you keep information current and monitor for anything unusual.
Simplified vs enhanced CDD
| Simplified CDD | Enhanced CDD | |
|---|---|---|
| When | Lower money-laundering / terrorism-financing risk | Higher risk, including politically exposed persons |
| What | Standard identification and verification | Extra checks, more scrutiny and senior sign-off |
How identity is verified
Identity must be established on reasonable grounds using reliable, independent information. That can be a sighted document with a structured attestation, or an online identity check. You then keep the evidence.
Senly AML runs customer due diligence for you, with KYC, KYB and sanctions screening built in and the evidence kept on file.
Questions, answered.
- What is customer due diligence?
- It is identifying and verifying who your customer is, and understanding your relationship with them, before and during the time you provide a designated service.
- What is the difference between simplified and enhanced due diligence?
- Simplified CDD applies to lower-risk customers; enhanced CDD applies to higher-risk customers, including politically exposed persons, and involves extra checks and scrutiny.
- How do I verify a customer's identity?
- On reasonable grounds using reliable, independent information, such as a sighted document with attestation or an online identity check, and you keep the evidence.
This guide is general information, not legal advice. The official source is austrac.gov.au.