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The importance of Enhanced Due Diligence

Enhanced Due Diligence (EDD) involves thorough investigations and continuous monitoring of high-risk customers. Our EDD solutions ensure compliance and protect against financial crimes.

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When should Enhanced Due Diligence be carried out?

By law, all regulated firms must meet Anti-Money Laundering (AML) regulations and carry out enhanced due diligence (EDD) when necessary. In cases when the risk for customers exceeds the scope of standard customer due diligence, Enhanced Due Diligence is required.
Ongoing business connections

Signs that suggest that there is a higher risk associated with an ongoing business connection. This could be through conversations with an individual or suspicious activity.

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Ongoing business connections

Signs that suggest that there is a higher risk associated with an ongoing business connection. This could be through conversations with an ...

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PEP

If a customer or business partner is determined to be a PEP (or is pointed out as closely related to them) it means that the individual has strong connections with those in positions of public power and may be engaged in money laundering and other illicit activities. This would therefore require further investigation.

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PEP

If a customer or business partner is determined to be a PEP (or is pointed out as closely related to them) it means that the individual has ...

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Money laundering risk

When there is an obvious money laundering risk, such as a suspicious transaction that cannot be justified or a customer who has raised red flags, careful examination is required.

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Money laundering risk

When there is an obvious money laundering risk, such as a suspicious transaction that cannot be justified or a customer who has raised red ...

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Fraudulent activity

Fraudulent activity may take place when a customer provides incorrect or stolen identification documents or information when opening an account. If there are any suspicions around this, EDD must be carried out immediately.

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Fraudulent activity

Fraudulent activity may take place when a customer provides incorrect or stolen identification documents or information when opening an ...

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Fraud Prevention

Who needs Enhanced Due Diligence?

To identify if your customer warrants enhanced due diligence, you should consider whether or not they meet any or all of the below criteria: 
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Detailed steps for Enhanced Due Diligence

There are no official guidelines regarding what EDD should actually entail; it’s only required that the further checks are proportionate to the level of risk that your customer poses.

 Evaluate customers based on risk factors and assign risk levels. Perform Enhanced Due Diligence (EDD) only on high-risk customers, particularly those from high-risk countries. This step ensures that resources are focused where they are most needed.

Standard Customer Due Diligence (CDD) involves verifying customer identification using documents like passports or driver’s licenses. Enhanced Due Diligence requires additional identity documentation to confirm the legitimacy of the customer more thoroughly.

Verify the source of customer wealth and establish the Ultimate Beneficial Owner (UBO) of their organization. Understanding the source of funds helps ensure they are not derived from illegal activities.

 Analyse transaction history for inconsistencies, including values and involved parties. This continuous review helps in identifying suspicious activities over time.

Investigate media coverage for adverse information about the client, particularly regarding past financial crimes or involvement with Politically Exposed Persons (PEPs). This step can uncover red flags that are not immediately apparent.

Visit the client’s business address to confirm identity and match it with provided documentation. This additional verification step helps ensure the business is legitimate and operating as claimed.

Document EDD plans and monitoring activities in a report, stored securely. Keeping detailed records ensures that your due diligence process is transparent and can withstand scrutiny during audits.

Develop a strategy for continuous monitoring, looking for patterns of suspicious activity over time. Regularly scheduled background checks should inform this ongoing risk assessment.

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Fraud Prevention

What happens if you don't do EDD?

Once you’ve identified that a customer is a risk to your company, failing to carry out Enhanced Due Diligence can make your business more vulnerable to financial crimes like money laundering.
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The help you need, when you need it

Whether you’re a small business just getting to grips with AML regulations or a large corporation with plenty of experience in compliance, SmartSearch can help you to comply with regulations, fight financial crime and grow your business with confidence.

 

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There’s a reason over 7,000 clients put their trust in us

We’re more than just an automated platform. SmartSearch will assist you with the design and implementation of a risk-based approach to suit your business. We’ll keep you up to date with ever-changing anti-money laundering regulations, and be your point of contact for any queries.
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The onboarding process has allowed us to enhance our user experience, whilst improving compliance oversight without the need for manual intervention.

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The ease and efficiency of the AML checks made SmartSearch really stand out. We were particularly impressed with the automatic reporting feature that instantly downloaded to the back-office system to deliver a full audit-trail of our clients.

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The SmartSearch system is easily accessible and very user-friendly. Customer service is excellent and any queries are met with a very quick and knowledgeable response.

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Trusted by over 7,000 regulated businesses, SmartSearch's next-generation technology is the leading provider for AML and risk management

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Make anti-money laundering and digital compliance easy - over 1,000 property firms benefit from our award-winning solutions.
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Helping ensure Financial Services Firms are AML compliant

Trusted by over 2,000 financial services firms to meet KYC and compliance obligations set by the Financial Action Task Force.

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AML in Investment Banking

Protect your investment firm and stay up-to-date with the latest compliance regulations for AML.

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AML in Insurance

Keep your insurance firm safe from financial crime and ensure your compliance with the latest guidance from the government.

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AML for Gaming firms

Ensure safe gaming for your organisation with SmartSearch’s all-in-one AML platform.

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AML for Cryptocurrency firms

Prevent financial crime, ensure compliance with anti-money laundering requirements, and protect your firm’s reputation with SmartSearch.

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AML for Property Development firms

Thanks to SmartSearch, it has never been easier for property developers and firms to keep on top of their AML requirements. 

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AML for Banking firms

Prevent financial crime, ensure compliance with anti-money laundering requirements, and protect your firm’s reputation with SmartSearch.

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How does Perpetual Know Your Customer (pKYC) work?

Perpetual KYC differs from a traditional KYC programme primarily in the sense that customer information is checked — and, as and when necessary, updated — continuously. This means that, if the customer’s status does change, you can be notified especially quickly.
What is AML (Anti-Money Laundering)?

This umbrella term covers measures AML-regulated firms are legally required to take for preventing criminals from illegally concealing the source of funds obtained from illicit activities like corruption, gambling, and human trafficking.

What is a risk based approach to money laundering?

Encouraged by both the FATF and the FCA, a risk-based approach requires that firms thoroughly assess the money laundering threat posed to their business, and deploy an appropriate amount of resources to counter it. This is a proactive approach which should enable companies to detect and diffuse any risk of money laundering before it can take place, whilst using resources efficiently.

What AML checks are required?

AML checks, or Anti-Money Laundering checks, are a crucial part of the financial system and are required by various regulatory bodies around the world. These checks are designed to prevent money laundering, terrorist financing, and other illegal activities. The specific AML checks required may vary depending on the jurisdiction and the nature of the business.

What are AML controls?

AML controls, also known as anti-money laundering controls, are measures put in place by financial institutions to detect and prevent money laundering activities. These controls aim to ensure that the institution is not unknowingly facilitating or participating in illegal financial transactions. AML controls typically involve the implementation of strict customer identification and verification procedures, monitoring of customer transactions for suspicious activities, and reporting of any suspicious transactions to the relevant authorities.

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