If a business or customer has a higher risk of money laundering, terrorist financing, or other financial crimes, they require an increased degree of due diligence. This is known as enhanced due diligence, which goes above and beyond the standard KYC/AML checks to gather information outside the basic scope.

This includes identifying the people and organizations behind customers, like the ultimate beneficial ownership (UBO) and identifying the true source for wealth or funds, as well as business activities. It also probes underlying relationships and examines unresolved transactions and activities that could indicate hidden risks.

It’s a crucial element in the fight against the financing of terrorists and criminals. It’s important to keep in mind that EDD is a security measure that should be used on a case-by-case basis. For example for example, a UK bank account opening with a clean passport, solid address history and no CCJs may not require CDD, while another customer might require EDD due the high quantity of cash deposits or more complex transactions.

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

In the end, effective due diligence doesn’t just mean complying with regulatory requirements or safeguarding your brand reputation; it’s about making a difference in the fight against global crime. To accomplish this you need a swift reliable, accurate and cost-effective identity verification and EDD solution.

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