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For customers with high risk The standard customer due diligence (CDD) process might not be sufficient. This is why enhanced due diligence is necessary: it involves deeper investigation to identify potential money laundering and terror financing risks. EDD research can help companies comply with regulations and protect their reputation.

Imagine that someone downloads your app to open an account that is brand new. They’ve cleared the identity verification tests, and your review of their financial records hasn’t raised any concerns. It’s great to hear that, but there could be negative news. This is because the customer could be a part of criminal enterprises that are trying to conceal money through illicit activities such as drug trafficking, corruption or terrorist activity. That’s why it’s essential for banks to carry out additional due safeguard your business’s critical assets with VDR encryption diligence that is based on risk on new and existing customers.

EDD can be required in many instances for businesses that are involved in high-risk industries, high-risk countries or any other industry requiring special scrutiny. EDD searches could include searches on sanctions lists and criminal watchlists to ensure that a company does not conduct business with individuals or companies that are that are banned by regulatory agencies.

A typical EDD investigation could include information such as a detailed background profile of the client, the origin and destination of the money and other indicators of financial crimes, such as the presence of PEPs, financial criminals or negative media. It may also contain detailed data about the beneficial ownership structure of a client, including identification of the individuals that control or own the legal entity as well as the sources of the funds and wealth.