Beyond KYC Utilities: Collaborative Customer Due Diligence for Financial Inclusion

Private Companies and the Public Sector, separately and together, are increasingly leveraging new collaborative approaches to help financial services providers (FSPs) meet international customer due diligence (CDD) requirements. To overcome well-documented financial inclusion challenges posed by required measures to combat money laundering and the financing of terrorism, FSPs and governments are exploring and adopting different types of collaboration, including sharing data and the compliance function, on a level that was previously unthinkable. These approaches, while different in form and function, can be collectively described as “collaborative CDD.” By pooling resources, these collaborative approaches have the potential to lower CDD costs and increase the effectiveness of anti-money laundering and combating the financing of terrorism measures, making it more feasible for FSPs to serve low-income customers with limited financial histories or those who are members of higher crime risk groups such as those living in or fleeing conflict.