What is Enhanced Due Diligence (EDD)?

Enhanced Due Diligence (EDD) is a more rigorous KYC process required for customers who pose a higher risk of money laundering, corruption, or financial crime. This includes Politically Exposed Persons (PEPs), customers from high-risk jurisdictions, and those involved in high-value or unusual transactions.

Unlike standard KYC, EDD requires businesses to look deeper into the customer's background. This may involve verifying the source of wealth (SoW), the source of funds (SoF), and conducting more extensive screening for adverse media and sanctions.

Regulatory bodies worldwide mandate EDD to ensure that businesses are not inadvertently facilitating illegal activities. By applying tougher scrutiny to high-risk relationships, companies can protect themselves from severe legal and reputational consequences.