Topic starter
30/10/2026 2:20 pm
TL;DR: Customer due diligence under the Money Laundering Regulations 2017 requires firms to identify, verify and monitor customers, then apply simplified, standard or enhanced checks based on risk, according to OneID. The core problem is not the rule itself but getting the tier right fast enough to avoid either onboarding drag or regulatory exposure.
Editorial analysis by NHI Mgmt Group, based on content published by OneID: “Customer due diligence (CDD) explained: SDD, standard and enhanced”.
Key questions
A: Simplified due diligence is appropriate only when preliminary screening shows a genuinely low money laundering risk.
Q: Why do reliable identity checks not replace customer due diligence?
A: Because CDD covers more than proving identity.
Q: What breaks when ongoing monitoring is treated as optional?
A: The firm loses sight of changes that make a once-acceptable customer relationship higher risk.
Practitioner guidance
- Separate risk tiering from verification workflow Define clear decision rules for simplified, standard and enhanced due diligence before identity capture begins, so the onboarding path reflects actual risk rather than default friction.
- Treat identity verification as one CDD control, not the whole control set Keep relationship purpose, beneficial ownership, sanctions and ongoing monitoring outside the proofing step so the firm does not mistake a match result for full compliance.
- Set review triggers for post-onboarding change Reassess customers when transaction patterns, geography, ownership or documentation risk changes, because the original CDD tier can become stale quickly.
Bottom line: Customer due diligence is a tiered identity-and-monitoring control, and the wrong tier creates either friction or regulatory exposure.
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