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Enhanced Due Diligence Checklist

What enhanced due diligence has to establish beyond standard checks, in the order that makes each answer usable — and the point at which the honest outcome is to decline.

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Enhanced means deeper, not longer

The failure mode in enhanced due diligence is volume: more documents, more screenshots, more pages, and no more certainty than before. Enhanced due diligence is not standard due diligence performed harder. It answers different questions, and the questions are about origin rather than identity.

Standard checks establish who someone is. Enhanced checks establish where their money came from and who ultimately controls the relationship.

1. Confirm you should be here

  • The risk rating is recorded and the reason for it is stated
  • The specific factor that triggered enhanced due diligence is named
  • Standard due diligence is complete — enhanced work on an incomplete file compounds the gap

2. Resolve ownership and control to a person

  • Ownership chain mapped to named individuals at every branch
  • Control identified separately from ownership — they are often different people
  • Any layer you could not resolve recorded explicitly, with what blocked it
  • Each named individual screened in their own right
  • Nominee or trustee arrangements identified as such

3. Establish source of wealth

  • How the customer accumulated wealth, in a sentence you could repeat to an auditor
  • Whether that account is plausible for the amounts involved
  • Independent corroboration for the main claim, not just the customer's statement
  • Any part of the account that remains unsupported, flagged rather than smoothed over

4. Establish source of funds

  • Origin of the funds entering this relationship
  • Consistency with the stated source of wealth
  • Route the funds took, and any jurisdiction they passed through
  • Whether the paying party is the customer

5. Go deeper on adverse media

  • Search beyond the screening tool's result set
  • Assess each item on seriousness, recency and reliability of the source
  • Distinguish allegation from finding, and record which it is
  • Check whether an old matter was resolved, and how
  • Record what you looked for and did not find, not only what you found

6. Understand the intended relationship

  • Expected activity: volumes, values, counterparties, jurisdictions
  • Why this business, and why now
  • What would count as unexpected, stated in advance
  • Whether the expectation has been shared with monitoring

That last one is where enhanced due diligence usually stops short. An expected-activity profile that never reaches the monitoring system is a document, not a control.

7. Decide, at the right level

  • Recommendation written by the person who did the work
  • Approval by someone with authority to accept the residual risk
  • Conditions of approval, if any, stated and monitored
  • Review cycle set shorter than for a standard customer
  • Trigger list set, and the profile from step 6 loaded into monitoring

8. The outcome that is not a failure

If steps 2 to 5 do not produce an answer you would be willing to read aloud in an inspection, the correct outcome is to decline or exit. That is not the process failing. That is the process working, and it is the only outcome that distinguishes a risk-based programme from a documentation exercise.

Questions

Common questions about enhanced due diligence checklist.

What is the difference between source of funds and source of wealth?
Source of funds is where the money in this particular transaction or relationship came from. Source of wealth is how the customer came to have money at all. A customer can give a perfectly good account of the funds — a transfer from their own account at another bank — while the source of wealth remains entirely unexplained, and it is the second question that does the work in enhanced due diligence.
How deep does beneficial ownership need to go?
To named individuals, not to another company. Stopping at a corporate shareholder because it sits above a percentage threshold is the most common way an ownership chain is recorded as complete while remaining unresolved. Where a layer cannot be resolved, that fact is itself the finding and belongs in the file.
When is declining the right outcome?
When you cannot get to an answer you could defend, and the relationship is not worth the residual uncertainty. That is a commercial decision as much as a compliance one, which is why it needs a named approver rather than an analyst's judgement. A programme that never declines anyone is not applying a risk-based approach.