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Enhanced Due Diligence for Financial Institutions

Trillions of dollars of laundered money circulate the globe each year, and 90% of that illicit money remains hidden. Financial institutions ought to use improved due diligence for and mitigate the risk of shady activities that may lead to reputational and financial harm and ensure AML compliance.

Improved due diligence (EDD) involves a more thorough analysis of individuals and companies that present improved risks for AML/CFT. It is an expansion of the buyer due diligence process, which is triggered each time a financial institution detects a high-risk element during that process. EDD may entail a much lower dive into the customer’s background transaction habits, and it is especially important for all those considered to be see exposed persons (PEPs).

A number of financial institutions principle moments of data room provider comparison have been struck with huge fines for failing to properly follow client due diligence expectations. A robust EDD strategy allows FIs to take care of raised risk consumers and transactions effectively while mitigating the potential for large monetary losses, legal penalties and negative multimedia attention.

Typically, EDD is initiated when the initial CDD determines a higher level of risk depending on country of residence, sector sector, deal patterns or perhaps associations with high-risk jurisdictions or individuals. During the EDD process, the FI is going to collect even more comprehensive information about the customer to get a better knowledge of their organization activities, corporate structure, beneficial possession and types of funds.

The EDD method also includes regular screenings of your customer against see lists, calamité and PEP lists to make sure that they are certainly not on virtually any lists that might trigger extra protocols. That is an essential component to effective and continuous monitoring, and the best EDD option will include a strong internal and external risk appraisal engine that can scan multiple databases.