Around $2tn of illicit cash flows per year through the financial system worldwide despite efforts by financial institutions and regulators. To combat dirty money, enhanced due diligence (EDD) is a method that involves a thorough Know Your Customers (KYC) which investigates customers in depth and transactions that have higher fraud risks.

EDD is generally considered to be a higher grade of screening than basic CDD and may require more information requests, including sources of wealth and funds corporate appointments, relationships with other individuals or companies. It may also require more in-depth background checks, including media searches, to identify any reputational or publically available evidence of misconduct or criminal activity that could create a risk to the bank’s business.

The regulatory bodies have guidelines for when EDD should be triggered. This is usually dependent upon the nature of the transaction or customer, as well whether the person concerned is politically exposed (PEP). It principle moments of data room provider comparison is the decision of each FI to decide if they want to include EDD to CDD.

The key is to formulate effective policies that make clear to employees what EDD is and what it doesn’t. This will make it easier to avoid high-risk situations that could result in substantial fines for fraud. It is essential to have an identity verification process in place that lets you identify red flags such as hidden IP addresses, spoofing technologies and fictitious identifiers.