What is the difference between CDD, EDD and SDD?
| Tier | When applied | Required steps |
|---|---|---|
| SDD — Simplified | Demonstrably low-risk customers / products | Reduced verification depth; ongoing monitoring still required |
| CDD — Standard | Default for most customers | Identity + verification + beneficial ownership + purpose + ongoing monitoring |
| EDD — Enhanced | Higher-risk customers, PEPs, high-risk jurisdictions, complex / unusual transactions, correspondent banking | Standard CDD plus additional information on source of funds / wealth, senior management approval, more intensive ongoing monitoring |
The risk-based approach (FATF Rec. 1) determines which tier applies.