Enhanced Due Diligence: Today’s EDD Isn’t Your Predecessor’s EDD

Abrigo
August 30, 2018
Read Time: min

Three things you need to stay compliant.

Customer Due Diligence has always been a topic of discussion, however, when FinCEN announced the requirement to obtain beneficial ownership information in 2016, this topic became the main point of focus for many in the BSA/AML industry. With the new Customer Due Diligence (CDD) rule in effect, financial institutions have been working tirelessly on collecting beneficial ownership information. While beneficial ownership is a major focal point, it is still very important to remember all that CDD entails. Have you thought about all of your customers/members with elevated risk categories? Are you doing enough enhanced due diligence (EDD) on them?

Most BSA professionals tasked with EDD have inherited the program from their predecessor. Like your grandma’s fine china that was passed down to you, it may be best to keep some things in the past. The bones of your current EDD program might be fine, but with so many technological and regulatory changes, it is important to take a step back and look at the big picture to see where you can create efficiencies within your program. When revising your EDD program, it is crucial to consider these three things:

The new CDD rule is in effect. Learn how we can help streamline your compliance.
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  1. Work smarter, not harder 
    Are you still using paper processes for EDD files? How many times do you notice yourself filling out the same information twice? If you answered yes to either of these questions, you are working twice as hard to do half the work. Paper processes are inefficient (not to mention environmentally unfriendly!) and allow more room for error. For example, think about how many times you have to update a customer’s/member’s expected activity. By the time you’ve updated all of your spreadsheets, it is usually time to update that information again.Take note of what information you’re replicating across departments and streamline your CDD and EDD processes with a solution that can adapt to your current policies and procedures, like Due Diligence Manager. Automating some of these processes will not only increase efficiencies but will also help keep you in compliance.
  2. Consolidation of records
    Do you find yourself having to go into multiple systems to gather information to perform ongoing periodic and high-risk reviews? Think of the additional time it takes to collect all of this information, on top of the time it takes to perform these reviews. By utilizing a system that gives you the ability to build out your full compliance review process, as well as manage the tasks associated with onboarding and periodic risk reviews all in one central place, you will save time and be more confident that you have all of the information needed to effectively perform CDD and EDD on your customer/member base. Due Diligence Manager, from Abrigo, provides you with this ability, so you no longer have to spend days compiling information from different sources.
  1. Visualize it
    The CDD/EDD/Beneficial Ownership/Signee “relationship web” can be a confusing and tangled one. Use technology to your advantage to simplify this. There are many free tools available to broaden the scope of customer/member information and make it easily digestible (com or www.CorporateWiki.com, for example). If you’re a BAM+ customer, you have access to BAM+’s Relationship View, to help you understand a complicated relationship instantly.

Just like fashion choices, Grandma’s china, and teller systems, sometimes things need to be updated to reflect current trends and technology. Updating your EDD process and workflows will make your job easier, help you to gain efficiencies and keep regulators happy come exam time.

As always, if you feel you need some extra help or aren’t even sure where to start, give us a call. Our Advisory Services team can work with you to assess your needs and support your BSA/AML program. Whether you need short-term help on a specific project or a long-term partner for ongoing assistance, your success is our number one goal.

About the Author

Abrigo

Abrigo is a leading technology provider of compliance, credit risk, and lending solutions that community financial institutions use to manage risk and drive growth. Our software automates key processes – from anti-money laundering to fraud detection to lending solutions – empowering our customers by addressing their Enterprise Risk Management needs. Make Big Things Happen. Get started at abrigo.com.

Full Bio

About Abrigo

Abrigo is a leading technology provider of compliance, credit risk, and lending solutions that community financial institutions use to manage risk and drive growth. Our software automates key processes — from anti-money laundering to fraud detection to lending solutions — empowering our customers by addressing their Enterprise Risk Management needs.

Make Big Things Happen.

 

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