What criteria may trigger enhanced due diligence (EDD) for a client?

Enhanced due diligence (EDD) is a crucial process in compliance that is triggered when a client presents a higher risk of money laundering or terrorist financing. The criteria that may trigger EDD typically include factors such as the customer's profile, geographic location, and the types of transactions being conducted.

A detailed customer profile helps in assessing risk by considering elements like the client's occupation, business activities, and previous banking history, which can indicate potential risk factors. For example, customers in industries more susceptible to fraud or money laundering may warrant closer scrutiny. Geographic location is also significant; clients from regions identified as high-risk for illicit activities can trigger EDD requirements due to the increased possibility of exposure to risks associated with that specific location. Moreover, the type of transactions—whether they involve large amounts, international transfers, or unusual transaction patterns—can raise red flags that necessitate a deeper review of the client's activities.

In contrast to this, factors like client satisfaction surveys, account balance history, and the number of transactions processed may provide insight into customer engagement and regularity of account activity but do not inherently assess risk related to potential money laundering or terrorism financing. Thus, these options do not serve as appropriate triggers for enhanced due diligence.