Due diligence is required when a consumer or a business poses a greater risk of money laundering, terrorist financing and other financial crimes. This is known as enhanced due diligence, which goes beyond the standard KYC/AML checks and gathers information that isn’t part of the basic scope.

This includes identifying the people and entities behind your customers, such as ultimate beneficial ownership (UBO), and uncovering the real source of wealth, funds and business activities. It also investigates mysterious transactions and actions and probes the root of the relationships.

It’s a key element in the fight against the financing of terrorists and criminals. It is important to remember that EDD is a tool that should be utilized on a case by case basis. For example the case of a UK bank account opening with a clean passport, a solid address history and no CCJs might only require CDD, whereas another customer might require EDD due to the large number of cash deposits or complex transactions.

The best method to determine the need for EDD is to create an entire risk assessment and screening framework. That should cover your internal controls as well as external factors like negative media and political instability, sanctions as well as terrorism finance organized crime, fraud and money laundering.

Effective due diligence isn’t just about satisfying regulatory requirements or protecting your brand reputation; it’s about having a positive impact in the fight against criminality in the world. To achieve this, you need a fast accurate, reliable https://warpseq.com/board-software-pricing-breakdown-detailed-review-of-the-cost/ and cost-effective identity verification and EDD solution.