Source-of-funds & source-of-wealth capture
Pre-built templates collect documentary evidence, parse bank statements, and structure narratives — every claim mapped to a source document.
Enhanced Due Diligence
Enhanced Due Diligence software for higher-risk customers.
Turn EDD from a 3-week manual case file into a 3-day evidence-backed decision. ComplianceSuite captures source of funds and source of wealth, routes cases by risk tier, and produces a regulator-ready file — aligned to EU AMLR (Reg. 2024/1624), FATF Recommendation 10, UK MLR 2017 Reg. 33, FinCEN CDD and MAS Notice 626.
- Median EDD cycle time: 3.5 business days
- Source-of-funds & source-of-wealth templates
- Digital senior-management sign-off
- Auto-scheduled 6/12-month reviews
Definition
What is Enhanced Due Diligence?
Enhanced Due Diligence (EDD) is the deeper set of KYC and KYB measures that regulated firms must apply to customers who present a higher risk of money laundering, terrorist financing or sanctions evasion. Where standard Customer Due Diligence identifies and verifies the customer, EDD adds documented source of funds, source of wealth, purpose of relationship, senior-management approval and enhanced ongoing monitoring.
Under EU Regulation 2024/1624 (AMLR), EDD is mandatory for PEPs and their RCAs, customers established in high-risk third countries, complex or unusual transactions with no apparent economic purpose, and any relationship the firm's own risk assessment flags as higher risk.
For the wider AML framework, see our guides to anti-money laundering, KYC and the AML glossary.
Capabilities
What's included.
Risk-tiered case routing
PEPs → senior-compliance queue. High-risk jurisdiction → MLRO queue. Complex UBO → analyst queue. Configurable rules per regulator.
Full UBO traversal
For legal-entity EDD, ownership is traced to natural persons across 240+ registries, with every UBO auto-screened for PEP, sanctions and adverse media.
Senior-management sign-off
Digital approval with rationale, tied to case ID, timestamped, audit-immutable.
Enhanced ongoing monitoring
Annual (or 6-monthly) auto-scheduled review, daily re-screening, event-triggered reviews on material changes.
Regulator-ready case file
One-click export of the full EDD case — evidence, rationale, sign-off, monitoring history — in the format examiners expect.
How it works
The four-step EDD workflow.
1. Risk-tier the customer
Rules engine scores every customer at onboarding across jurisdiction, product, channel, PEP status, industry and transaction profile — auto-classifying into standard, high or very-high risk.
2. Collect enhanced evidence
For high-risk cases, the platform auto-requests source-of-funds documents, source-of-wealth narrative, and — for entities — full UBO chain, tax residency and structure chart.
3. Analyst + senior sign-off
Analyst reviews evidence, writes rationale in the structured EDD template; senior compliance / MLRO signs off digitally. All decisions timestamped and immutable.
4. Enhanced ongoing monitoring
Auto-schedule the next review (6 or 12 months), daily re-screen PEP/sanctions/media, and trigger event-based reviews on material changes.
Example
Three EDD cases and how ComplianceSuite handles them.
| Tier | Scenario | Required action |
|---|---|---|
| Very high — PEP + high-risk jurisdiction | Corporate account, UBO is domestic PEP, entity registered in FATF grey-listed country | Board-level sign-off, full source-of-wealth dossier, 6-month review cycle, quarterly transaction re-review. |
| High — Complex ownership | Fintech customer with 5-layer holding structure across 3 jurisdictions and a trust vehicle | Full UBO traversal + resolution certificate, MLRO sign-off, annual review, ongoing monitoring on all UBOs. |
| High — Unusual transaction | Existing retail customer receives €250K inbound from a new counterparty in a high-risk jurisdiction | Event-triggered EDD refresh, source-of-funds request, transaction narrative, MLRO decision within 5 business days. |
Regulatory coverage
EDD obligations across major regimes.
| Regime | Scope | EDD requirement |
|---|---|---|
| EU AMLR (Reg. 2024/1624) | EU 27 | EDD mandatory for PEPs, high-risk third countries, complex/unusual transactions. Art. 24–36 detail evidence, sign-off and monitoring frequency. |
| FATF Recommendation 10 | Global standard | Risk-based EDD on all higher-risk customers; documented rationale and enhanced ongoing monitoring. |
| UK MLR 2017 Reg. 33 | United Kingdom | EDD required for PEPs, correspondent relationships, high-risk third countries and any 'complex or unusually large' transaction. |
| FinCEN CDD Rule (31 CFR 1010.230) | United States | Beneficial-ownership identification + risk-based EDD for higher-risk customers; senior foreign political figures require enhanced scrutiny. |
| MAS Notice 626 §8 | Singapore | EDD on higher-risk customers with senior-management approval, source-of-wealth documentation, and enhanced ongoing monitoring. |
| HKMA AML/CFT Guideline | Hong Kong | EDD on PEPs and higher-risk relationships; source of funds and source of wealth documented before account opening. |
Working in a specific market? See Europe, Middle East, North America and Cyprus.
Frequently asked questions.
What is Enhanced Due Diligence (EDD)?
Enhanced Due Diligence is the deeper KYC/KYB process regulated firms apply to higher-risk customers — PEPs, high-risk jurisdictions, complex ownership structures, cash-intensive businesses and unusual transaction patterns. EDD goes beyond standard CDD by capturing source of funds, source of wealth, purpose of relationship, and senior-management approval.
When is EDD legally required?
Under FATF Recommendation 10, EU AMLR (Regulation 2024/1624), UK MLR 2017 Reg. 33, FinCEN CDD Rule and MAS Notice 626: for all PEPs and their RCAs, customers in high-risk third countries on the EU/FATF grey or black lists, complex or unusual transactions with no apparent economic purpose, and any relationship the firm's risk assessment classifies as higher risk.
What is the difference between CDD and EDD?
CDD (Customer Due Diligence) is the baseline: identify the customer, verify identity, understand the purpose of the account, and monitor transactions. EDD adds source-of-funds and source-of-wealth evidence, senior-management sign-off, enhanced ongoing monitoring frequency, and — for legal entities — full UBO traversal and adverse media.
What documents does EDD require?
Typically: passport plus a second government ID, proof of address, source-of-funds evidence (bank statements, payslips, sale contracts), source-of-wealth narrative with supporting documents (property deeds, share certificates, inheritance records), corporate structure charts, tax residency certificate and — where applicable — professional-reference letters.
How long does an EDD case take?
ComplianceSuite EDD cases complete in a median 3.5 business days: automated data collection and screening in <5 minutes, analyst review 1–2 days, senior-management approval 1 day. Manual EDD in most banks takes 10–20 business days per case — ComplianceSuite reduces that by ~80% with pre-populated templates and evidence-capture workflows.
Does EDD need to be repeated?
Yes. Under EU AMLR Art. 24 and FATF R.10, EDD customers require enhanced ongoing monitoring: full re-review at least annually (some regulators require every 6 months for the highest-risk tier), continuous PEP/sanctions/adverse-media re-screening, and event-triggered reviews on material changes (new UBO, jurisdiction change, unusual transaction).
Who signs off on EDD decisions?
Senior management — typically the MLRO or Head of Compliance for standard high-risk cases, and a designated board-level approver for PEP relationships or customers in FATF black-listed jurisdictions. ComplianceSuite routes cases automatically based on the risk tier and captures the digital sign-off in the audit trail.
How is source of wealth different from source of funds?
Source of funds is the origin of the specific money used in a transaction or funding the account (e.g. 'salary from Employer X'). Source of wealth is the origin of the customer's total net worth (e.g. 'inherited family business sold in 2018 for €4.2M'). EDD requires both, with documentary evidence.
Run a real EDD case in ComplianceSuite.
Bring a live high-risk customer — we'll walk through source-of-funds capture, UBO traversal, screening and sign-off in one session.
Related screening
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