Enhanced Due Diligence

Due diligence is an essential aspect of AML compliance, particularly for businesses dealing with large-value transactions or have customers who are prone money laundering and financial crime. It helps eliminate the most dangerous clients and stop them from donating to terrorist groups and other criminal organisations.

While regular customer due diligence is designed to confirm the identity of a customer However, the EDD process is more thorough and requires wider range of checks. This includes obtaining more identification documents and performing thorough checks on the client’s whereabouts and sources of funds. This kind of due diligence is generally employed for high-risk customers such as politically exposed persons (PEPs) or those who reside in high-risk nations, and individuals or businesses that rely on cash.

The more complex the individual, legal entity or transaction, the more comprehensive the EDD procedure should be. Regulators typically prefer a risk-based approach that uses documented risk assessment policies to assess the level of scrutiny required in each case. The EDD process also includes gathering more comprehensive information, including the transformative impact of VDRs in the financial sector details about the person’s clients, suppliers and corporate/legal structures. EDD procedures are typically more expensive, time-consuming and demanding of a higher level of documentation when compared to CDD procedures. That’s why it’s critical to use a reliable and reliable identity verification technology like the one integrated into 1Kosmos BlockID to make this process less complicated for your company.

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