Enhanced Due Diligence

Enhanced due diligence (EDD) is a risk based due diligence system that enables businesses to manage high-risk transactions and customers while remaining in compliance with regulations. If properly implemented enhanced due diligence can protect businesses from serious legal penalties and reputational damages while ensuring their Anti-Money Laundering and Customer Due Diligence procedures are effective in combating financial crimes.

Often, EDD is required when a customer or transaction is deemed to be high-risk due to complex ownership structures, political exposure or involvement in industries that are susceptible to financial criminal activity. A significant change in customer’s behavior, like an increase in volume of transactions, or the creation of new types of transactions may be a reason for an EDD. Furthermore any transaction that involves a nation or a region with a higher risk of money-laundering and terrorism financing is likely to require an EDD.

EDD is focused on the identification of beneficial owners, while revealing risk factors such as the real beneficiaries of a bank account or transaction. It also identifies suspicious or unusual patterns in transactions, and then validates the information using independent checks or interviews, visits to sites, and third-party verification. The risk assessment is carried out by a thorough review of the local market reputation via media sources, and existing AML policy.

EDD is not just a regulatory requirement; it’s an essential part of protecting the integrity of the global financial current trends in digital room solutions system. Implementing EDD procedures that are effective is more than a matter for compliance. It’s an investment in the safety and security of the global financial system.