Trillions of dollars of laundered money circulate the globe each year, and 90% of that dubious money remains undiscovered. Financial institutions need to use increased due diligence to name and mitigate the risk of shady activities t reputational and financial damage and ensure AML compliance.

Increased due diligence (EDD) involves a more thorough analysis of individuals and companies that present heightened risks for AML/CFT. It is an extendable of the client due diligence method, which is triggered every time a financial institution picks up a high-risk element in that process. EDD may involve a better dive into the customer’s background transaction patterns, and it is specifically important for many considered to be politically exposed persons (PEPs).

Numerous financial institutions warpseq.com have been hit with significant fines to get failing to properly follow customer due diligence requirements. A robust EDD strategy allows FIs to take care of lifted risk buyers and financial transactions effectively although mitigating the potential for large monetary losses, legal penalties and negative multimedia attention.

Typically, EDD is started when the initial CDD pinpoints a higher level of risk depending on country of residence, industry sector, purchase patterns or associations with high-risk jurisdictions or individuals. During the EDD process, the FI definitely will collect even more comprehensive information about the customer to get a better knowledge of their business activities, corporate structure, beneficial control and options for funds.

The EDD process also includes frequent screenings of the customer against view lists, sanctions and PEP lists to ensure they are not really on any kind of lists that might trigger more protocols. This can be an essential a part of effective and continuous monitoring, and a very good EDD alternative will include a strong internal and external risk examination engine that will scan multiple databases.