Using a CDD provider gives an institution access to established policies and analyzes the institution’s current policies. This comparison reveals the KYC program pitfalls as well as the measures that can enhance the program.
Enhanced customer due diligence provided by a third party helps with independent verification of identity, beneficial ownership, and other risk factors. Providers also offer platforms for monitoring large cash transactions, cross-border transactions, and changes in payment sources.
At the end of the day, CDD providers are one tool a financial institution can use to ensure they are compliant with FinCen regulations. The enhanced measures provide transparency and security against nefarious or criminal banking activity.