01
Source of funds & wealth
Establish and evidence where the customer's money and overall wealth come from.
Glossary · EDD
What is Enhanced Due Diligence (EDD)?
Going deeper when the risk is higher.
Enhanced Due Diligence (EDD) is the heightened set of checks a regulated firm applies to customers who present a higher money-laundering or sanctions risk. It goes beyond standard customer due diligence with more information, more evidence, and senior approval.
02
Additional verification
Collect extra identity, ownership, or corroborating documentation beyond standard CDD.
03
Senior sign-off
Require senior-management or compliance approval to onboard or continue a high-risk relationship.
04
Closer monitoring
Apply a tighter review cadence and lower alert thresholds for ongoing activity.
Definition
EDD is a deeper level of customer due diligence required for high-risk customers and relationships. It typically includes establishing the source of funds and source of wealth, gathering additional identifying information, applying closer ongoing monitoring, and obtaining senior-management approval to onboard or continue the relationship.
Why EDD matters
High-risk relationships carry the greatest exposure. Regulators expect firms to apply proportionately stronger controls — and to evidence that they did. EDD that is consistently applied and documented is a frequent focus of audits and examinations.
How Pegalio helps
EDD adds steps, approvers, and evidence — exactly the kind of complexity that gets lost in email. Pegalio makes EDD a defined branch of the onboarding workflow: extra document requests appear automatically for high-risk cases, an additional approval gate routes to the right senior approver via RBAC, and every piece of evidence and sign-off is captured in the audit log for examiners.
Frequently asked questions
When is EDD required?
For high-risk customers — for example PEPs, customers in high-risk jurisdictions, complex or opaque ownership structures, or unusually large or unexplained transactions.
How is EDD different from standard CDD?
EDD requires more information (especially source of funds and wealth), more documentation, senior approval, and closer ongoing monitoring.
Does EDD apply to all PEPs?
Most regimes require EDD for PEPs and often their close associates and family members, on a risk-sensitive basis.
How long must EDD records be kept?
Retention periods vary by jurisdiction but are commonly five years after the relationship ends; keep auditable records of every EDD decision.