Enhanced enhanced due diligence, also known as EDD (Enhanced Due Diligence), applies to customer relationships presenting a high level of risk. It is applied when the identified level of risk exceeds the scope of standard AML-CFT compliance. It requires additional checks, more detailed documentation, and monitoring tailored to the observed profile.

At AP Solutions IO, we help your compliance teams to structure this process with a risk rating that is explainable, traceable, and actionable during an audit. To structure your decisions, you can access AP Scoring, our risk scoring solution, or request a demo.

Standard due diligence and enhanced due diligence: what’s really changing

The standard due diligence allows us to identify the customer and understand the business relationship, and verify KYC or KYB, and then assess the initial risk level. It forms the foundation of your customer due diligence.

Enhanced enhanced due diligence is required when this foundation is no longer sufficient to support the decision. Your teams must then conduct a more in-depth analysis, verify the consistency of the relationship, and examine theorigin of the funds, monitor changes in risk, and maintain clear documentation of the decisions made.

As part of the KYC due diligence, the challenge lies not in the accumulation of documents, but in the quality of the analysis produced. A misinterpreted supporting document, an alert related to a case involving a PEP without sufficiently in-depth analysis, or a country-of-exposure risk can weaken your system during an audit.

Conversely, an structured EDD helps you justify establishing, maintaining, restricting, or terminating a relationship. Each decision is then based on formalized criteria, a documented analysis, and a clearly documented history.

At AP Solutions IO, we start from a core belief: compliance must be demonstrable. Your decision must be traceable, understandable, and defensible.

Situations that warrant heightened vigilance

The enhanced monitoring is triggered when a signal changes the risk level of the client, the beneficial owner, a counterparty, or a transaction. These signals may appear at the time the relationship is established, and then throughout the customer relationship.

The most common cases involve a politically exposed person, one of their close associates, or a person connected to them. These situations may also involve a connection to countries posing a AML-CFT risk, sanctioned areas, or sensitive jurisdictions.

Economic activity that is difficult to justify given the declared profile should also be cause for concern. The same caution is required when dealing with unusual amounts, fragmented flows, or atypical transactions.

Certain legal structures require enhanced due diligence, particularly when the beneficial owner remains difficult to identify. An alert triggered by sanctions screeningand PEP screening or transaction monitoring can also trigger further analysis.

These situations call for a proportionate response rather than a one-size-fits-all approach. A PEP , an executive exposed to international risks, a company with opaque ownership, or a client whose cash flows change abruptly all require different levels of oversight.

To explore this point further, your team can structure theESD with your procedures regarding politically exposed persons, reputational risk, and high-risk AML-CFT countries. This work enhances the consistency of your risk matrix and minimizes isolated decisions.

Operational measures to be implemented during an EDD

Enhanced enhanced due diligence combines verification, analysis, validation, and follow-up. It must remain proportionate to the risk, with sufficient evidence to meet the expectations of an internal auditor, a statutory auditor, and theACPR or Tracfin or the supervisor to whom you report (DGCCRF, professional association, etc.)

The measures may include thorough identification of the customer, the legal representative, and the beneficial owner. They may also involve collecting additional information regarding the business activity, income, assets, or ownership structure.

The analysis must focus on thesource of the funds, the destination of the funds, and the economic justification for the transaction. The screening may be intensified for international sanctions, embargoes, and PEP and negative media coverage.

For sensitive cases, approval by the appropriate level of management is still required. The KYC, KYB or KYS must also be updated more frequently when the risk warrants it.

Transaction monitoring is then based on more precise . This monitoring avoids reducing theEDD to a one-off check, without continuity over time.

This method addresses the challenges faced by teams:

• a large number of alerts;
• incomplete applications;
• heterogeneous trade-offs;
• time-consuming false positives;
• lack of transparency regarding the decisions made.

It also reduces tensions between compliance, business units, and senior management, as the criteria for analysis become formalized, shared, and easier to justify.

At AP Solutions IO, we connectEDD with a explainable risk scoring. Your teams understand why a case is moved to enhanced monitoring, what factors influenced the assessment, what actions result from it, and what information will be retained in the file.

Documenting and tracking ESD to enhance auditability

The traceability plays a central role inEDD. A sound but poorly documented decision becomes harder to defend. Your teams must be able to retrieve the data used, the rules applied, the alerts generated, the checks performed, and the validations obtained.

This requirement applies to both customer files and transactions. When an alert is triggered, your system must be able to trace the steps taken. It must specify the signal detected, the analysis performed, the documents reviewed, the decision made, the approvals obtained, and any escalation measures taken.

Theauditability protects your organization. It reduces reliance on informal communication, facilitates continuity during staff turnover, and prepares for periodic reviews. It also helps you demonstrate a proportionate approach, aligned with your risk map and your internal procedures.

Our Glass Box Augmented Intelligence meets this requirement. Unlike opaque models, it retains a structured explanation of the decision. Recommendations are based on justifiable rules, configurable criteria, and actionable history.

Supporting ESD with AP Scoring

AP Scoring allows you to transform enhanced due diligence into a controlled process. Our solution assesses the level of risk associated with the client based on more than 90 configurable criteria, in accordance with your AML-CFT, your risk appetite, your sector-specific profiles, and your internal rules.

The risk rating may incorporate factors related to the business relationship: 

• customer identity;
• beneficial owner;
• country of exhibition;
• distribution channels and relevant products. 

It may also take into account penalties, PEP, observed flows, and the results of monitoring. It allows for the adjustment of due diligence measures from the outset of the relationship and as the situation evolves.

This approach helps your teams reduce the spread of treatments and better filter out false positives , prioritize sensitive cases, and reassess decisions with greater accuracy. Our technologies can help reduce false positives by up to 98%, depending on the settings and use cases.

AP Scoring integrates into our SaaS suite, fully accessible via API, along with AP Scan, AP Monitoring and AP Filter. This allows you to link KYC, KYB, KYS, sanctions, PEP, transaction monitoring, and scoring in an open, multilingual, and code-free configurable architecture. Hosting in France enhances data control, sovereignty, and alignment with GDPR.

Based in Paris, at 9 rue des Colonnes, AP Solutions IO has been bringing together more than 15 years of expertise AML-CFT AML-CFT with RegTech designed for today’s compliance, traceability, and risk management requirements. Our regular updates, integrated regulatory monitoring, and RegTech100 2025and Leading 50™ FCC, Wavestone’s Top Pick and Platform58 all serve a simple goal: to make compliance more effective, more structured, and more defensible.

To structure your system, you can integrate this process into your due diligence and KYC, then schedule a personalized presentation from our page Request a Demo.

FAQ — Enhanced Due Diligence

ESD: What does the acronym stand for?

EDD stands for Enhanced Due Diligence. In French, it is referred to as due diligence renforcée or enhanced vigilance. It refers to the additional checks applied when a customer, a transaction, or a business relationship presents an higher AML-CFT risk .

When should heightened vigilance be exercised?

The heightened vigilance applies in particular when a PEP, a sensitive country, or an opaque legal structure increases the level of risk. It may also be triggered by an sanctions alert, an unusual amount, or an atypical transaction. The trigger must remain aligned with your risk mapping, your internal procedures, and your KYC, KYB or KYS.

What additional checks should be planned for?

The audits may concern the source of funds, the destination of funds, the actual business activity, assets, and Beneficial Owners. They may also include analysis of counterparties, geographic links, and results from screening. The expected work involves producing an actionable analysis, prioritized and validated by the appropriate level of management.

How do you document enhanced due diligence?

An EDD must maintain a record of the data used, the alerts generated, the checks performed, the documents consulted, the decisions made, and the approvals obtained. With AP Scoring, this documentation is based on an explainable scoring, configurable criteria, and Glass Box designed for auditability.

Making ESD a well-managed compliance process

Enhanced enhanced due diligence becomes a robust process when it is based on a clear methodology, reliable data, and explainable technology.

At AP Solutions IO, we designEDD as an enhanced compliance approach: more structured for your teams, more robust for your audits, and more sustainable for your architecture . To assess the role ofAP Scoring in your KYC/KYS, you can request a demo and work with us to develop an approach tailored to your risks.