What customer due diligence consists of
Article 13 of the EU directive lists the measures, and UK regulation 28 follows the same pattern:
- Identifying the customer and verifying the identity from a reliable, independent source
- Identifying the beneficial owner, with reasonable measures to verify
- Assessing the purpose and intended nature of the relationship
- Ongoing monitoring of transactions, and keeping the information up to date
- Checking that anyone acting for the customer is authorised, and identifying that person
When customer due diligence applies
- EU and UK: when a business relationship is established
- EU and UK: when money laundering or terrorist financing is suspected, or earlier identification data is in doubt
- EU: an occasional transaction of EUR 15,000 or more, or a transfer of funds above EUR 1,000 (Article 11)
- UK: an occasional transaction of £12,000 or more, or a transfer of funds above £800, in sterling since 30 June 2026 (regulation 27)
- EU from 10 July 2027: an occasional transaction of at least EUR 10,000, or EUR 1,000 for crypto-asset service providers (Regulation (EU) 2024/1624, Article 19)
Identity is verified before the relationship starts or the transaction is carried out. A firm that cannot complete the measures does not go ahead, ends the relationship and considers a report to the financial intelligence unit (Article 14).
How far the checks go
Every measure applies to every customer, but the firm sets its extent on a risk-sensitive basis. Lower risk allows simplified due diligence, and higher risk calls for enhanced due diligence.
CDD, KYC or KYB?
- KYC
- The industry's name for the same duty, most often used for the identity checks on an individual.
- KYB
- Customer due diligence on a company: its existence, its managers and its beneficial owners.
- Enhanced due diligence
- Extra measures on top of the standard ones, where the risk is higher.
Where customer due diligence shows up in a platform
Modules that do the work
- KYC / AMLIdentity checks, screening and ongoing monitoring, with the verification provider you choose.
- Merchant onboardingBusiness sign-up, verification and underwriting, from application to first payment.
- Compliance reportingTransaction monitoring, the Travel Rule and regulatory reports, ready for your regulator.
Platforms that need it
Guides that go deeper
- How to launch a neobank without a banking licenceYour own e-money licence, an EMI's agent, a partner bank or a bank licence: how each route works, who holds the money, and what safeguarding and deposit protection cover.
- How to launch a business account with expense cards for SMEsThe account, the cards and the controls around them: what a business account with expense cards needs, from licensed partners and KYB to SCA and the interchange rules for commercial cards.
Where it is written
The laws and standards this page's facts come from.
- Directive (EU) 2015/849, the Anti-Money Laundering Directive, consolidated: Articles 11, 13 and 14 (EUR-Lex)
- Regulation (EU) 2024/1624, the AML Regulation, Article 19 (EUR-Lex)
- Money Laundering Regulations 2017, regulations 27 and 28 (legislation.gov.uk)
General information, not legal advice: what applies to you depends on your services and your market.