If a business or customer has a higher risk of money laundering, terrorist financing, or other financial crimes, they must be subject to an increased degree of due diligence. Known as enhanced due diligence (EDD), this goes beyond the standard KYC and AML checks by collecting information outside of the basic scope.

This involves identifying the people and entities behind your customers, such as ultimate beneficial ownership (UBO), and uncovering the real source of wealth, money and business activities. It also investigates the underlying relationships as well as investigates unproven transactions and activities that may signal hidden risks.

It’s a crucial tool to fight criminal and terrorist funding. However it’s important to keep in mind that EDD must be considered on an individual basis. For instance, a UK bank account opening with a clean passport, solid address history and no CCJs may only require CDD, while another customer might require EDD due to the high volume of cash deposits, or complex transactions.

The best way to assess the necessity for EDD is to establish a comprehensive risk assessment and screening framework. This should include internal controls as well as external factors like negative media, political instability and sanctions, financing of terrorism and organized crime as well as fraud.

In the end, effective due diligence read post here warpseq.com doesn’t just mean satisfying regulatory requirements or protecting your brand’s reputation. It’s about making a real impact in the fight against criminality in the world. To achieve this you need a swift efficient, accurate and affordable identity verification and EDD solution.