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Understanding the True Value of Due Diligence
Due diligence is a necessary process both for financial institutions and for individuals worldwide, to get an in-depth look at whom they are dealing with. The concept of customer due diligence (CDD) refers to the exercise of reasonable care in the course of business. A due diligence check involves careful investigation of the economic, legal, fiscal and financial circumstances of a business or individual, by collecting and analysing information before making a decision.
With banking services now being digitised, due diligence is also important to Know Your Customer and is mandatory for banks and financial institutions worldwide. For all organisations hoping to effectively deal with potential risks, performing an investigation on prospective or even existing customers is a necessity.
Top due diligence fundamentals for 2023 include:
Due diligence increases in value: The FTX collapse is a true example of an eye-opening compliance incident which highlights the value of due diligence. Detecting compliance red flags takes on new importance as the depth of due diligence and quality of risk assessment are reviewed more closely.
The recent ruling by the Court of Justice of the European Union which states ‘’public’s access to information on beneficial ownership constitutes a serious interference with the fundamental rights to respect for private life and to the protection of personal data” will cause an increase in the complexity of verifying UBOs.
AI is assisting compliance teams by handling a lot of the tedious tasks, which gives space and time for proactive work that addresses the most challenging issues such as complicated due diligence scenarios.
At eBOS, our WiseBOS Suite of solutions, offers a range of modules designed to manage risk, carry out customer due diligence and follow the best security standards. Furthermore, our WiseBOS GRC puts forth a bespoke solution that provides your organisation with effective and efficient Governance, Risk, and Compliance Management, providing an effective risk management framework while fully complying with business rules and regulations.