5 Key Steps for Effective Client Due Diligence


Client Due Diligence: Ensuring Effective
Risk Management and Regulatory Compliance

This report outlines five key steps for effective CDD and emphasises their significance in mitigating risks associated with potential clients.

1. Identification Verification

Reliable and independent sources must be utilised to collect and authenticate information such as full legal name, address, date of birth, and official identification documents (e.g., passport, driving license, national ID). 

The aim is to confirm the authenticity of the provided information and ensure it aligns with credible sources.

We at Validient service individual and commercial clients, offering individual client onboarding (KYC) as well as organisational onboarding (KYB).

2. Client Risk Assessment

Factors such as the client’s reputation, geographical location, industry sector, and the nature of the intended business relationship are evaluated. 

This step assists in determining the level of risk the client may pose and aids in establishing appropriate risk mitigation strategies.

With our innovative tool, you can create templates to digitally standardise custom risk assessment forms tailored to the specific needs of your business or industry.

3. Customer Profiling

By analysing the client’s financial behaviour and patterns, including transaction histories, you can identify irregularities or suspicious activities that may warrant further investigation.

At Validient we offer proof of funds reports, offering a real-time, accurate view of funds. And our beneficial ownership look-up allows you to identify ownership structures and beneficial ownership within organisations.

4. Ongoing Client Monitoring

Regularly reviewing and updating client information ensures ongoing compliance with regulations and facilitates the timely detection of any unusual behaviour or changes in circumstances.

This proactive approach is crucial in identifying and preventing potential illicit activities.

Our ongoing client monitoring feature provides real-time updates directly from Companies House, ensuring you stay informed about the current status of your client’s organisation.

5. Client Document and Record-Keeping

Documents and information gathered during the due diligence process, including identification documents, risk assessments, transaction details, and communications with the client, serves as evidence of compliance with regulatory requirements. 

Proper record-keeping also facilitates audits and investigations, if necessary.

The Validient dashboard holds all information and documents collected in one secure location. View documents, reports, risk assessments, history logs, client information, and tasks.


Adherence to these five key steps not only ensures a robust CDD process but also demonstrates an organisation’s commitment to ethical business practices and regulatory compliance. Get started today for a free trial, and book a demo.

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