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Finance & Banking vocabulary · Corporate Finance

Due diligence

Meaning in finance & banking, with examples

nounCommon term

In finance & banking, due diligence means: A careful investigation of a company, deal or customer before an agreement, to check the facts and find any risks or legal and financial problems.

In Turkish: durum tespiti, detaylı inceleme, özen yükümlülüğü

How it is used

Used in M&A, lending and compliance. Buyers carry out financial and legal due diligence; banks do customer due diligence (CDD) and, for high-risk clients, enhanced due diligence (EDD). Turkish teams often keep the English term.

Example sentences

  1. The deal will close after the buyer finishes its due diligence.

  2. For high-risk clients we carry out enhanced due diligence every year.

Common collocations

  • carry out due diligence
  • legal due diligence
  • customer due diligence
  • enhanced due diligence
  • M&AShort for mergers and acquisitions: deals in which companies combine with each other or one company buys another.
  • KYCShort for know your customer: the checks a bank makes to confirm a customer's identity, address and source of funds before and during the business relationship.
  • valuationAn estimate of what a company, asset or property is worth, or the process of calculating it.
  • complianceFollowing the laws, regulations and internal rules that apply to a bank; also the name of the department that checks that this happens.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Corporate Finance

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This page explains English vocabulary for learners. It is not financial advice.