Enhanced Due Diligence (EDD)
Overview
Enhanced Due Diligence is a deeper investigation applied to higher-risk customers, transactions, or relationships beyond standard CDD. It expands identity proofing, verifies source of funds/wealth, maps ownership/control (including UBOs), and assesses geographic, product, and channel risks. EDD typically adds adverse media reviews, onsite/virtual interviews, tighter limits, senior-level approvals, and more frequent monitoring.Triggers include PEP status, complex structures, high-risk jurisdictions, negative news, unusual activity, or crypto exposure. Good EDD is documented, repeatable, and proportional capturing evidence, decisions, and periodic review dates. It should integrate with risk scoring, transaction monitoring scenarios, and case management for auditability. While rigorous, EDD must balance thoroughness with customer experience by using orchestration, coached capture, and clear requests. Effective EDD reduces residual risk, deters misuse of the institution, and demonstrates a credible risk-based approach to regulators and partners.
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