Simplified Due Diligence (SDD)

Under a risk-based approach, not every customer needs the same effort. Where the risk is low, rules allow measures such as accepting less documentation, verifying identity after the relationship begins, updating the file less often or monitoring at a lower intensity. Typical candidates are listed public companies, government bodies or basic products with low limits, but the decision depends on the firm's own risk assessment and on local law, which may list eligible cases. SDD is never an exemption from due diligence: some identification is still required, and monitoring must continue so that suspicious activity can be spotted. If suspicion arises, or the risk picture changes, the firm must move to standard or enhanced measures. A reviewer checks that the low-risk label rests on a documented assessment and that the account was moved up when behaviour changed.

A prepaid card issuer offers a basic product with a low load cap and no international transfers. Under its risk assessment, holders of this product are low risk, so staff verify identity using a single government ID and skip proof of address. When one holder starts receiving many loads from unrelated people, the card is rated higher risk and full checks are applied.