Module 2 – Risk-Based Approach, KYC/CDD & EDD

What this module covers

This module focuses on how the risk-based approach works in practice for customers.
You will work with risk factors, KYC and CDD standards, beneficial ownership, high-risk customers,
enhanced due diligence and institution-wide risk assessments.

By the end of the module you will be able to connect:

• Customer risk factors (customer type, products, geography and channels).
• KYC and CDD processes (identification, verification, purpose and intended nature).
• Beneficial ownership and control for legal persons, trusts and other structures.
• PEPs, high-risk customers and EDD triggers.
• CDD files, remediation and record-keeping.
• Institution-wide risk assessment, NRA linkages and risk appetite.

Who this module is for

This module is designed for:

• KYC/CDD analysts and onboarding teams.
• AML, compliance and risk staff who review or rely on customer due diligence.
• Front-line staff who need to understand customer risk and documentation expectations.

You should already be comfortable with the ideas from Module 1: AML/CFT objectives, harms,
governance, the risk-based approach, documentation and inspections.

How this module works

Module 2 follows the same structure as Module 1:

• 10 lessons covering risk factors, KYC/CDD, beneficial ownership, EDD, CDD files and institution-wide risk assessments.
• Each lesson has:
  • Essentials text (required).
  • A 10–12 question quiz linked directly to the Essentials (required).
  • A Specialist Tools pack as a downloadable PDF (optional but recommended).
• The Module 2 Wrap-Up brings the themes together and helps you update your evidence pack.

You complete a lesson when you:

1. Read the Essentials.
2. Pass the quiz.
3. (Optional) Download and use the Specialist Tools for that lesson.

When you complete all lessons and quizzes in this module, you will receive the
Module 2 – Risk-Based Approach, KYC/CDD & EDD Certificate.

How this connects to the full specialisation

Module 2 builds directly on Module 1.

• Module 1 gave you the overall AML/CFT framework: objectives, harms, governance, risk-based approach, documentation and inspections.
• Module 2 focuses on the customer view: how you identify and manage customer risk through KYC, CDD and EDD.

Later modules in the specialisation will go deeper into areas such as transaction monitoring, sanctions,
investigations and sector-specific risks. Module 2 is the foundation for customer-facing and KYC-heavy roles.