Customer Due Diligence is essential in the anti-money laundering (AML) framework and is a regulatory requirement in many jurisdictions. The CDD process involves identifying and verifying the identity of a customer, understanding the intended purpose of the business relationship, and assessing the associated risks. It helps prevent fraud, money laundering, and terrorist financing by ensuring that institutions know who they are dealing with and can monitor their transactions for suspicious activities. CDD typically involves collecting personal information, verifying documents, and maintaining records for compliance purposes.