The Cost of Customer Acquisition in Banking: The Role of Due Diligence

This study analyzes the costs associated with acquiring new customers in the banking sector, with a focus on the impact of Customer Due Diligence (CDD) on the total acquisition cost (CAC). Through revised modelling with data from industry sources and hypothetical cases, it is highlighted how regulatory requirements related to anti-money laundering and KYC compliance can significantly affect banks' operating costs. Technology solutions and strategies to optimize these costs while preserving compliance and improving the user experience are discussed.