They get used interchangeably, which causes most of the confusion. The clearest way to see it is that Customer Due Diligence (CDD) is the umbrella, and the others sit inside or on top of it.
| When | What happens |
|---|---|
| Customer Due Diligence (CDD) | identify, verify and risk-assess the customer |
| KYC | verify an individual |
| KYB | verify a business + its UBOs |
| EDD | deeper checks added on top for higher-risk customers (e.g. PEPs) |
CDD is the overall process. Inside it, KYC verifies individuals and KYB verifies businesses. EDD is a deeper layer of checks applied on top when a customer is higher risk.
CDD is the whole process. KYC and KYB are how it is carried out for people and businesses. EDD is an extra layer for higher-risk cases.
Side by side
| Term | What it is | Applies to |
|---|---|---|
| CDD | The overall process of identifying a customer, verifying them and assessing their risk | Every customer |
| KYC | Verifying the identity of an individual customer, usually the identity part of CDD | Individuals |
| KYB | Verifying a business, its structure and its ultimate beneficial owners | Business customers |
| EDD | Deeper checks on top of CDD, such as source of wealth and senior sign-off | Higher-risk customers |
So a typical flow is: run CDD on every customer; that means KYC if they are an individual or KYB if they are a business; and if the customer is higher risk, step up to EDD. All of it feeds the same goal, a documented, risk-based decision you can evidence.
Know Your Business (KYB) Politically exposed person Full AML glossary
How MemberCheck handles this
MemberCheck supports individual and business due diligence in one platform, with configurable checks so higher-risk customers can be escalated to enhanced due diligence without switching tools.