Around $2 trillion in illicit cash flows each year through the financial integrating VDRs in your business for a competitive edge system worldwide despite efforts by financial institutions and regulators. To combat dirty money enhanced due diligence (EDD) is a process that requires a thorough Know Your Client (KYC) which digs deep into customers and transactions that have higher risk of fraud.

EDD is regarded as having a higher screening level than CDD and can contain more information requests like sources and corporate appointments, funds, and relationships with individuals or companies. It can also involve more in-depth background checks, including media searches to discover any publically accessible or publically known evidence of misconduct or criminal activity that could pose danger to the bank’s business.

Regulatory bodies have guidelines on when EDD should be triggered. This is usually dependent on the type of transaction or customer, as well whether the person in question is politically exposed (PEP). However, it’s ultimately up to each FI to make a personal judgement on what triggers EDD on top of CDD.

It is important to have policies that clearly explain to employees what EDD expects and what it is not. This helps to avoid high-risk situations that could lead to substantial fraud fines. It is important to have a verification process for your identity in place that allows you to identify red flags like hidden IP addresses, spoofing technology and fictitious identifications.