In world organizations, industries and financial institutions used essentially know your customer (KYC) & Customer due diligence (CDD) for managing higher risk of financial crimes including money laundering terrorist financing, identity theft and many other crimes. Which help to manage business and individual involved relationship risk. KYC & CDD is legal and obligatory according to regulatory compliance in many countries around world.
Adequate due diligence on new and existing customers is a key part of these controls. Without comprehensive due diligence, your firm can become subject to reputational, operational, legal and financial risks.