KYC/CDD in Practice (Risk-Based Approach: RDD / ADD / EDD)

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Duration 2 days – 14 hrs

 

Overview

 

This hands-on course helps participants apply Customer Due Diligence (CDD) correctly in real operations using a risk-based approach. It focuses on practical customer risk profiling, deciding when RDD (Reduced), ADD (Additional), or EDD (Enhanced) due diligence is appropriate, and documenting decisions in a way that stands up to QA, audit, and regulatory review. Participants also learn how to handle transactors / non-account customers (walk-ins, OTC, remittance, cash-in/out, one-time transactions) under risk-based CDD and monitoring.

 

Objectives

 

  • Explain and apply the risk-based approach to CDD across onboarding, servicing, and transactions.
  • Perform customer risk profiling using standard risk factors (customer type, geography, product/service, channel, behavior).
  • Distinguish RDD vs ADD vs EDD and apply the correct level based on defined triggers.
  • Identify common EDD triggers (e.g., high-risk customer types, PEP indicators, unusual patterns, high-risk geographies/channels, complex ownership structures, adverse information).
  • Execute CDD/EDD documentation: what evidence is needed, how to write a defensible rationale, and how to record approvals/exceptions.
  • Handle transactors/non-account customers with appropriate identification, threshold-based checks (where applicable), escalation, and record-keeping.
  • Reduce rework by applying quality standards for completeness, consistency, and audit trail.

 

Audience

 

  • KYC analysts / onboarding teams / account maintenance
  • Branch/ops staff handling customer updates and transactions
  • Customer support teams supporting onboarding or verification
  • Compliance / QA reviewers who validate KYC files
  • Team leads/supervisors for KYC operations

 

Pre- requisites 

  • Basic understanding of AML/KYC concepts (or completion of AML/CTF Fundamentals)
  • Familiarity with your organization’s onboarding/transaction processes is helpful (not required)

 

Course Content

 

Day 1 — Risk-based CDD foundations and profiling

 

Module 1: Risk-Based CDD essentials 

  • What “risk-based” means in day-to-day operations
  • CDD lifecycle: onboarding → ongoing monitoring → periodic review → event-driven review
  • Roles and handoffs (frontline, ops, compliance, QA)

Exercise: CDD lifecycle mapping for your process

 

Module 2: Customer risk profiling workshop 

  • Risk factors and how to score/weight them:
    • Customer type (individual, corporate, NGO, etc.)
    • Product/service risk
    • Delivery channel risk (digital/agent/branch)
    • Geography risk
    • Behavior risk
  • Risk rating outcomes and what it changes (CDD depth, approvals, review frequency)

Workshop: Risk-rate 5 customer profiles + justify the rating

 

Module 3: RDD vs ADD vs EDD decisioning 

  • Clear definitions and operating rules
  • What typically qualifies for:
    • RDD: lower-risk profile + stable patterns + clean signals
    • ADD: gaps needing additional info before proceeding
    • EDD: higher inherent risk or high-risk triggers
  • Building a decision tree your team can follow

Deliverable: RDD/ADD/EDD decision matrix template

 

Module 4: EDD triggers deep dive 

  • Common EDD triggers and how to evidence each one:
    • High-risk customer type / industry
    • PEP indicators (and PEP-related risk handling)
    • Unusual behavior vs stated profile
    • Complex/opaque ownership structure
    • High-risk geography / corridor / channel
    • Negative news/adverse info signals
  • Escalation rules and approvals

Exercise: “Trigger or not?” scenario drill

 

Day 2 — Documentation mastery and transactors/non-account customers

 

Module 5: Documentation that survives QA/Audit (

  • What “defensible” documentation looks like:
    • Evidence checklist (IDs, business docs, BO, source of funds/wealth as applicable)
    • Consistency checks (names, addresses, nature of business, purpose)
    • Capturing rationale: why this risk rating and why this CDD level
  • Handling exceptions: expired IDs, missing docs, alternative evidence, temporary controls
  • Common findings and how to prevent them

Workshop: Fix a “bad KYC file” and rewrite the rationale

 

Module 6: Beneficial Ownership basics (for CDD practice) 

  • Identifying BO and control persons (practical approach)
  • Ownership structure red flags (layering, nominees, shell entities)
  • Documentation pack and verification steps

Workshop: BO identification from 2 sample org charts

 

Module 7: Transactors / Non-account customers 

  • Who are transactors and why they matter
  • Practical handling model:
    • Identification and minimum data capture
    • Threshold-based and risk-based checks (where applicable)
    • When to escalate / refuse / delay / request more info
    • Record keeping and watchlist screening considerations
  • Patterns: structuring/smurfing, mule behavior, rapid cash-in/cash-out

Scenario lab: Walk-in transactions and edge cases

 

Module 8: Operating controls and QA framework 

  • Maker-checker controls and approvals
  • KYC QA scoring (completeness, accuracy, rationale, evidence)
  • KPIs for KYC ops: rework rate, turnaround time, defect density
  • Continuous improvement: top root causes and quick fixes

 

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  • Explain warehouse processes and their impact on inventory accuracy and service performance.
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        Target Audience  
  • Warehouse supervisors, team leaders, and managers.
  • Inventory controllers and stock control personnel.
  • Logistics and distribution supervisors.
  • Internal auditors and operational compliance personnel.
  • Supply chain and operations professionals.
  • Personnel responsible for reviewing warehouse controls and performance.
  Prerequisites  
  • Basic familiarity with warehouse, logistics, or inventory activities.
  • General understanding of business processes and operational documentation.
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Course Outline

  Day 1: Warehouse Processes, Layout, and Storage Controls Module 1: Warehouse Operations and Process Controls  
  • Warehouse roles within the supply chain.
  • End-to-end flow: receiving, put-away, storage, replenishment, picking, packing, and dispatch.
  • Physical stock movement and corresponding system transactions.
  • Responsibilities, authorization, and segregation of duties.
  • Common operational weaknesses and audit evidence.
  Module 2: Warehouse Layout and Storage Systems  
  • Functional zones, movement paths, and space utilization.
  • Receiving, storage, picking, staging, and dispatch areas.
  • Storage options: floor stacking, shelving, pallet racking, and bin storage.
  • Fixed and dynamic location systems.
  • Product slotting based on movement, size, handling needs, and compatibility.
  • Layout bottlenecks and their effects on productivity and inventory control.
  Module 3: Receiving and Put-Away  
  • Purchase orders, delivery documents, and expected receipts.
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  • Recording shortages, overages, damage, and discrepancies.
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  • Put-away rules and location confirmation.
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  • Timely recording of receipts and stock movements.
  Module 4: Storage, Stock Rotation, and Replenishment  
  • Storage discipline and location integrity.
  • FIFO and FEFO principles, applications, and limitations.
  • Batch, lot, and expiry-date management.
  • Controls for slow-moving, obsolete, damaged, and expired stock.
  • Replenishment of picking locations.
  • Supervision and review of stock rotation compliance.
    Day 2: Order Fulfillment and Inventory Accuracy Module 5: Picking Strategies and Order Fulfillment  
  • Discrete, batch, zone, and wave picking.
  • Selecting picking strategies for different order profiles.
  • Pick paths, location sequencing, and travel reduction.
  • Replenishment coordination and stock availability.
  • Picking verification and error prevention.
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  • Handling short picks, substitutions, cancellations, and returns.
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  • Item master data, units of measure, and location records.
  • On-hand, available, allocated, and quarantined stock.
  • Transaction controls for receipts, transfers, issues, returns, and adjustments.
  • Common causes of physical and system stock mismatches.
  • Barcode scanning and WMS control points.
  • Inventory reconciliation and supporting documentation.
  • Measuring inventory accuracy and interpreting discrepancies.
  Module 7: Cycle Counting and Physical Inventory  
  • Cycle counting versus full physical inventory.
  • ABC classification and risk-based count priorities.
  • Count frequency based on value, movement, and discrepancy history.
  • Count preparation, blind counting, and movement controls.
  • Recounts, variance investigation, and adjustment approval.
  • Root cause analysis and corrective action follow-up.
  • Reviewing the effectiveness of the counting program.
  Module 8: Shrinkage Reduction and Inventory Protection  
  • Sources of shrinkage: loss, damage, theft, misplacement, and recording errors.
  • Access controls and accountability for stock movements.
  • Controls for high-value and sensitive inventory.
  • Returns, write-offs, scrap, and disposal controls.
  • Exception reporting and unusual transaction patterns.
  • Investigating recurring losses and unexplained adjustments.
  • Preventive and detective controls for shrinkage reduction.
    Day 3: Performance Management, Process Review, and Improvement Module 9: Warehouse Productivity and Inventory KPIs  
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  • Put-away productivity and replenishment performance.
  • Picking productivity and order accuracy.
  • Inventory accuracy and cycle count variance.
  • Space utilization and storage capacity.
  • Shrinkage, damage, and expiry indicators.
  • Defining KPI formulas, data sources, and reporting boundaries.
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  Module 11: Warehouse Improvement Planning  
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  Module 12: Capstone — Warehouse Operations and Inventory Improvement Plan  
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