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April 16, 2025

What is Enhanced Due Diligence (EDD): A Comprehensive Guide 2025

Team FOCAL
Article
Table of Content
Key TakeawaysWhat is Enhanced Due Diligence (EDD)?What is Customer Due Diligence (CDD)?What’s CDD All About?
When Does CDD Come into Play?
Enhanced Due Diligence Vs. Customer Due Diligence1. Depth of Scrutiny2. Risk MitigationWho Needs Enhanced Due Diligence and When? The Critical Significance of Enhanced Due Diligence1. Protecting Financial Institutions‍2. Addressing High-Risk EntitiesEDD in the Banking Sector: A Critical Safety Net1. Risk Mitigation in Banking2. Fulfilling Compliance ObligationsAML Requirements and EDD: Allies Against Financial Crimes1. AML Laws and Enhanced Due Diligence Requirements2. Global ImpactImplementing Enhanced Due Diligence: Your How-To Guide1. Gathering Comprehensive Data2. Obtain Additional Identifying Information3. Analyze the Source of Funds and Ultimate Beneficial Ownership (UBO)4. Implement Transaction Monitoring5. Employ Adverse Media and Negative Checking6. Conduct On-Site Visit7. Implement Ongoing Monitoring8. Integrating Advanced ToolsReal-life EDD Application: Politically Exposed Persons (PEPs)1. Identifying PEPs2. The Challenge and SolutionChecklist for Successful Enhanced Due Diligence1. Data Gathering2. Assessment3. ComplianceConclusionFAQ:
Q1. What is EDD in the Know Your Customer (KYC) process?Q2. How can I spot customers who need enhanced due diligence monitoring due to high risk?Q3. When is higher due diligence necessary for customers?Q4. In KYC, what sets apart customer due diligence (CDD) from enhanced due diligence (EDD)?Q5. What is EDD meaning in banking?

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