#QuickBiteCompliance Day 73
Getting to Know Your Customer: Why It’s Important to Stay Safe!
Imagine you’re throwing a party. You want to make sure everyone coming in is your friend, so you check their names at the door. This helps you avoid letting in strangers who might cause trouble. In the world of money, we call this Customer Due Diligence (CDD)—it’s how banks and businesses make sure they know who they’re dealing with.
But guess what? Some bad guys try to sneak past these checks to commit financial crimes. Here’s how they do it:
🔍 Example 1: Fake Identities
A bad guy might create a fake ID to pretend they’re someone they’re not. They use this to open accounts and hide stolen money.
🔍 Example 2: Using Someone Else
Sometimes, criminals convince others (called “mules”) to open accounts for them. This makes it harder to trace the bad guy’s activities.
🔍 Example 3: Hiding Big Transactions
Bad guys might try to break up a big money transfer into smaller amounts so it looks normal and avoids raising red flags.
With CDD, banks check IDs, understand how customers usually use their accounts, and make sure they’re not dealing with anyone suspicious. This protects not just the bank but also people like you and me from being caught in financial crimes.
💡 The next time you see someone verifying details, remember: they’re doing it to keep everyone safe!
#CustomerDueDiligence #AntiFinancialCrime #KnowYourCustomer #FinancialSafety #FraudPrevention #AML #RiskManagement #InclusiveRegtech #OpenSourceAML
Source: https://www.acams.org/en/resources/aml-glossary-of-terms