In 2024, regulators imposed $4.6B in AML, KYC, and sanctions penalties, underscoring the steep cost of compliance failures. One of the largest actions came from FinCEN, which fined TD Bank $1.3 billion, alongside additional penalties from the OCC and Federal Reserve.
The lesson is clear: without robust customer due diligence (CDD), organizations face not only financial penalties but also reputational and operational damage. Every onboarding, monitoring, and review decision carries exposure to regulatory scrutiny.
A structured customer due diligence checklist safeguards against these risks. It standardizes processes, ensures documentation, and reduces oversight errors — giving firms confidence in an environment of heightened enforcement.
What you will get from the whitepaper
This whitepaper goes beyond a simple task list. It provides a practical framework and expert guidance to help compliance teams build and maintain effective customer due diligence programs aligned with global AML and KYC standards.
Inside, you’ll find:
- A customer due diligence checklist template, covering identification, verification, beneficial ownership, risk profiling, sanctions and PEP screening, adverse media, monitoring, and recordkeeping
- Annotations and customization tips for adapting requirements to different risk levels, jurisdictions, and industries
- Best practices for automating ID verification, centralizing workflows, and integrating third-party screening tools
- Guidance on auditability and compliance with FATF recommendations, EU AMLD, and FinCEN requirements
- Case study insights showing how asset managers like Sagitta SGR streamline CDD using secure virtual data rooms
- Actionable strategies to align due diligence with broader compliance programs, from training staff to ensuring traceability
This resource equips compliance professionals with both a customer due diligence checklist example and the context to apply it effectively.
Why customer due diligence is essential
The customer due diligence process is a statutory requirement under U.S. and international AML regimes. Beyond legal compliance, it protects institutions from facilitating illicit finance and shields them from reputational harm.
Key reasons why CDD is critical:
- Risk management
Strong CDD identifies high-risk clients early, enabling enhanced due diligence measures or client rejection where appropriate. - Regulatory expectations
Supervisory bodies require documented, repeatable workflows. A customer due diligence checklist ensures every client file can withstand regulatory review. - Reputational integrity
Failures in CDD can lead to damaging headlines and erode stakeholder trust. A structured AML checklist for onboarding demonstrates diligence to investors, auditors, and counterparties.
Modern compliance requires more than one-time onboarding checks. Continuous monitoring is essential to identify changes in client risk profiles. Firms that rely on fragmented spreadsheets or ad hoc reviews risk missing key warning signs.
Download the customer due diligence checklist
For compliance officers and professionals managing client onboarding due diligence, the cost of inadequate CDD is only rising. A clear, practical customer due diligence checklist transforms compliance from a box-ticking exercise into a documented, risk-based approach to CDD that withstands regulatory and stakeholder scrutiny..
Download the white paper today to access:
- A step-by-step framework
- A practical, editable template
- Real-world examples of effective implementation
Strengthen compliance, reduce risk, and stay audit-ready with this expert-designed customer due diligence checklist PDF.
