Enhanced Due Diligence

key aspects of digital storage provider selection

Enhanced due diligence is a crucial component of AML compliance for companies that handle high-value transactions and/or customers that are susceptible to money laundering and other financial crime. It’s used to eliminate the most prone customers and stop them from funding terrorist groups and other criminal organizations.

While the regular process of customer due diligence is designed to determine the identity of a customer but the EDD procedure is more comprehensive and requires a more checks. This includes obtaining more identification documents, as well as conducting thorough checks on a customer’s location and the source of funds. This kind of due diligence is usually utilized for high-risk clients such as politically exposed individuals (PEPs) or those who are in high-risk countries, and individuals or businesses which are cash-intensive.

The more complicated the person, legal entity or transaction, the more extensive the EDD procedure should be. Regulators typically prefer a risk-based method that makes use of documented risk assessment policies to assess the amount of scrutiny required in each case. The EDD process includes gathering more detailed information, such as information about the person’s clients and suppliers as well as corporate/legal structures and legal structures. EDD processes are often more costly, time-consuming and require more documentation compared to CDD procedures. That’s why it’s critical to have a strong and reliable identity verification technology like the one integrated into 1Kosmos BlockID to make this process more efficient for your business.