Customer due diligence, or CDD, is critical for financial establishments and companies that intend to work with clients long term in Indonesia. It is also an imperative skill that all analysts involved in Countering the Financing of Terrorism (CFT) or Anti-Money Laundering (AML) should possess.
What is customer due diligence and why is it so important then? Companies, especially financial institutions, carry out customer due diligence to gain insights on potential clients. These insights enable organisations to know how much risk a client is presenting, and if they could be a potential bad actor or fraud.
In many countries, it is a legal requirement to conduct customer due diligence when an institution is establishing business relations with a prospective customer during the induction stage.
Therefore, as financial frauds are commonplace globally, it is critical to perform customer due diligence in Indonesia as well. Carrying out an effective customer due diligence in Indonesia can go a long way to prevent potential downfalls when an individual or a company turns out to be litigious or dishonest.
Being able to detect potential red flags through a CDD can also preclude organisations from tremendous stress and losses.
Types of Due Diligence in Indonesia
The three main categories of customer due diligence in Indonesia depend on the level and depth of investigation.
Cekindo offers an integrated service that is customised based on your business needs.
- Standard customer due diligence
- Simplified customer due diligence
- Enhanced customer due diligence
Steps for Conducting
Customer due diligence is about getting access to client’s information data and verifying them.
The following are steps that most organisations adhere to as a standard flow of customer due diligence:
1. Obtain important client’s information and data
- Full name of customer
- Residential address
- Birthplace and date of birth
- Contact number
- Email address
- Nationality
- Gender
- Occupation
- Marital status
- Signature sample
2. Screen and analyse the acquired information and data
- Evaluate the risks associated with the data. For example, check if the client’s country of residence is of high risk
- Decide the level of customer due diligence, i.e. standard CDD, simplified CDD, or enhanced CDD.
3. Follow the correct level of customer due diligence depending on a client’s business process
- Enhanced customer due diligence is suitable for more complicated cases such as a politically-exposed company or individual
- Simplified customer due diligence is sufficient for clients with low transaction values
4. Conduct ongoing monitoring of clients even if you have already established business relationships with them
- Determine the change of client’s profile
- Verify if they are involved in high-risk transactions or commit frauds
- Know if they comply with legal regulations constantly
- Ensure all collected client’s data are up-to-date
Customer Due Diligence in Indonesia with Cekindo
Cekindo’s customer due diligence service helps you evaluate and investigate business opportunities and potential risks.
With our assistance, we enable you to flag the legal risks that might turn up from a customer’s financial obligations, contracts, or criminal records. The investigation further extends into all relevant aspects of the past, present, and predictable future of your target customer.
Our customer due diligence service is comprehensive, in-depth, and thorough. All customer’s backgrounds will be checked and verified.
If there are gaps in the customer’s history we can’t fill, we will also include these discrepancies that may cause potential legal issues in our reports.
If you are interested in Cekindo’s customer due diligence service in Indonesia; or if you have some questions regarding due diligence, contact us via the form below.
