Enhanced Due Diligence Trigger

An enhanced due diligence trigger is any factor, event or transaction that obliges a bank or other regulated firm to move a customer from standard checks to enhanced due diligence (EDD). Some triggers are set by law: dealings with a politically exposed person, links to countries on the EU's high-risk third country list or under a FATF call for action, cross-border correspondent banking relationships, and transactions that are unusually large or complex with no apparent economic purpose. Others come from the firm's own policies, such as a high score in its customer risk rating model, serious adverse media, a complex ownership structure, a change in business activity or a suspicious activity report. Triggers can arise at onboarding or during the relationship, and firms are expected to document each trigger and the extra measures applied. Also see ongoing due diligence.