Trillions of dollars of laundered money circulate the world each year, and 90% of that dubious money remains hidden. Financial institutions have to use improved due diligence to distinguish and mitigate the risk of sketchy activities t reputational and financial harm and ensure AML compliance.

Improved due diligence (EDD) involves a far more thorough analysis of individuals and companies that present improved risks for AML/CFT. It is an extendable of the customer due diligence process, and it is triggered each time a financial institution detects a high-risk element in that process. EDD may entail a greater dive in the customer’s background transaction patterns, and it is especially important for some of those considered to be noteworthy exposed people (PEPs).

Many financial institutions best data rooms online secure and reliable have been hit with large fines with regards to failing to properly follow customer due diligence standards. A robust EDD strategy allows FIs to handle increased risk customers and trades effectively although mitigating the potential for large monetary losses, legal penalties and negative media attention.

Commonly, EDD is started when the primary CDD identifies a higher level of risk depending on country of residence, sector sector, deal patterns or associations with high-risk jurisdictions or individuals. During the EDD process, the FI should collect even more comprehensive information concerning the customer to obtain a better knowledge of their business activities, corporate structure, beneficial title and sources of funds.

The EDD procedure also includes regular screenings of an customer against enjoy lists, sanctions and PEP lists to make sure that they are not on virtually any lists that could trigger added protocols. This is an essential element of effective and continuous monitoring, and an excellent EDD solution will include a robust internal and external risk diagnosis engine that may scan multiple databases.