Enhanced due diligence is a due diligence based on risk process that empowers businesses to effectively manage transactions and customers at risk while still adhering to the regulations. When properly implemented it shields businesses from significant reputational and legal penalties while ensuring that their Anti-Money Laundering (AML) and Customer Due Diligence (CDD) procedures are efficient in combating financial criminality.

EDDs are generally required when a customer or transaction is deemed to be high risk due to complex ownership structures or political risk. They may also be required if the customer is involved in an industry that is susceptible to financial crime or money laundering. In addition there is a significant shift in the behavior of a customer such as an increase in volume of transactions or unfamiliar types of transactions could require an EDD. Lastly, any transaction involving any region or country that is more prone to financial terrorism and money laundering requires an EDD.

EDD is embracing cloud solutions for flexible operations focused on the identification of beneficial owners and uncovering undiscovered risks, like the real beneficiaries of the transaction or account. It also detects unusual or suspicious patterns in transactional behavior, and validates information with independent checks, interviews, site visits and third-party verification. The risk assessment is carried out by a review of the local market’s reputation, based on media sources, and existing AML policy.

EDD isn’t just a legal requirement, it’s a crucial element of safeguarding the integrity of global financial system. Implementing EDD procedures that are efficient is more than a matter for compliance. It’s an investment into the security and safety of the global financial system.