Enhanced due diligence where agents build each high-risk customer's EDD file, cite every sentence of the memo, and wait for your BSA Officer to sign
Every EDD file a cited memo, with activity checked against what the customer declared.
See one case, screen by screen ↓Enhanced Due Diligence (EDD) Review is a workflow for a bank's BSA team in which agents build the enhanced due diligence file for each high-risk customer: they compare the activity the customer declared with what it actually did, draft a memo with a source on every sentence, and read it back the way an examiner would. The BSA analyst answers what the agents could not settle and submits, and the BSA Officer, and for the relationships the bank's policy names the Chief Risk Officer, approve before anything is written to a system.
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Enhanced due diligence is the deeper file a bank keeps on the customers it rates high risk: money services businesses, cash-intensive businesses, nonresident aliens, politically exposed persons, charities, independent ATM operators and third-party payment processors. Since the FFIEC rewrote the customer sections of its BSA/AML Examination Manual on December 1, 2021, no customer type is high risk by label alone, so the file has to show the reasoning: source of funds, the activity the customer declared, licensing and registration where they apply, site visits, adverse media and an approved decision, refreshed at least once a year.
Today a BSA analyst rebuilds that file by hand every year. Statements, licenses, site-visit notes, adverse media and twelve months of activity come out of five systems; the declared range sits in last year's memo, and the comparison with what actually happened is redone in a spreadsheet. Memos say “activity is consistent with the business” without a source, FinCEN registration and state license dates live in spreadsheets, and a relationship is re-approved while its monitoring threshold stays where it was, so the same expected growth raises an alert every month.
Estimated split of one annual EDD review for a money services business: 4.5 hours by hand, the midpoint of the three to six hours a file practitioners describe, against the analyst's time reading, answering and submitting the file the agents built. Our arithmetic, kept modest.
Five agents build and check the file, a Memo Writer cites every sentence, an Examiner Reader tests it; three people sign.
Quarry Street Check Cashing, Inc., customer TC-208814 since April 2019, is a licensed check casher and money order agent at Tessaly Community Bank, rated High · 78. Its annual EDD review is due November 6, 2026. Here is what happens to the file, screen by screen, in the working solution.
The agents started the annual file on September 22 and finished assembling it on October 21 at 6:12 PM, from the core banking system, the transaction monitoring system, document imaging, the CRM's site-visit notes, the adverse media service and the public registration and license lookups. On Thursday, October 22 at 9:40 AM, BSA Analyst Renee Albright opens a file that is already drafted, 15 days before it is due.
A shaded band shows the cash the customer declared it would order each month at its last review, $380,000 to $420,000. Twelve dots show what it ordered: eight months sit above the band, and since March every month has been between $574,000 and $611,000. A switch redraws the picture for checks deposited and wires.
Cause found by the agents: two new stores opened in February.
Renee clicks March. The currency order record opens with the lines the agents used highlighted: cash ordered $611,000, 27 shipments by armored carrier, outside the declared range of $380,000 to $420,000.
The memo follows the bank's template for money services businesses: licenses and registration, source of funds, activity versus expectation, adverse media, site visit and recommendation. It cites FinCEN MSB registration RG-0000-3182, next renewal due December 31, 2026; state check casher license CC-0000-0218, active to June 30, 2027; 214 CTRs filed on time; and one $48,500 wire on June 12 to Millrace Fixtures LLC for the store fit-out. The header reads 22 sentences, 22 cited.
The state's public lookup lists only the two original stores. A license amendment adding 2210 Ferrous Avenue and 87 Millrace Road, dated February 3, 2026, is in document imaging, but the scan reads at 0.62 confidence, under the 0.80 floor. So the agents do not guess: the memo ends with one question line, and Renee opens the scan herself.
Does the state license cover the two new stores?
Renee reads the amendment and confirms it adds both new stores to license CC-0000-0218. The agents add one sentence to the memo's licensing paragraph with the scan and her confirmation as its sources, and the header now reads 23 sentences, 23 cited.
The Examiner Reader reads the memo against the FFIEC manual's section on money services businesses and the bank's EDD policy EDD-2026.1, confirms the minimum steps for an MSB account, and lists three weak claims: no per-store split behind the increase, license coverage resting on a hard-to-read scan, and FY2025 statements that predate the expansion.
The increase is blamed on the new stores, but no per-store split is shown.
Renee accepts the agents' two fixes. From the store cash log: in September the two original stores ordered $402,000, inside the old range, and the two new stores $206,000. From the interim statements to June 30, 2026: six-month revenue of $1,720,000, up 21% on the same half of 2025.
Renee submitted the file as maker at 9:58 AM. Gloria sees the risk rating unchanged at High, expected cash ordered moving to $560,000 to $640,000 and checks deposited to $2.7 million to $3.1 million, monitoring rule MSB-CASH-ORD-01 rising from $460,000 to $700,000, the next review on November 6, 2027, and how each weak claim was closed. She approves with the reason code “Activity explained and evidenced”.
The bank's EDD policy names money services businesses, so the Chief Risk Officer approves after the BSA Officer. Only then, at 2:06 PM, is the $700,000 threshold written to the transaction monitoring system, the expected activity to the customer profile in the core, and the next review, with a site visit, to the calendar. The examiner pack is sealed with 47 items.
The same file, seen by the four people who carry it: what their review season looked like, and what it looks like now.
Five agents build and check the file, a Memo Writer cites every sentence, an Examiner Reader tests it; three people sign.
Starts each annual file 45 days before it is due and pulls statements, licenses, agreements, site-visit notes, ownership and twelve months of activity from six systems.
Draws the declared range as a band and each month's activity as a dot, for cash ordered, checks deposited and wires; explains every month outside the band with a cited cause and proposes a new range.
Checks FinCEN MSB registration, state licenses, locations and agent status, and tracks renewal dates.
Reads financial statements, tax returns and interim figures and ties them to the customer's activity.
Searches four news and enforcement sources, separates name matches from the customer and classifies relevance.
Drafts the EDD memo on the bank's template for the customer type, paragraph by paragraph with a source on every sentence, and writes the recommendation and the question line.
Reads the finished memo against the FFIEC manual and the bank's EDD policy, lists every weak claim and proposes a fix.
Runs the annual review calendar, SLAs and escalations, and drafts document requests to customers with a tipping-off check.
Maker submits, checker approves, second line for MSBs. The agents propose; a named person decides.
Ask about a month, a license, a due date or an export, and the answer points to the record, the scan or the policy it came from.
Why is Quarry Street's March outside the band?
March cash ordered was $611,000 against a declared $380,000 to $420,000. Two new check-cashing stores opened in February, and in September the original stores alone stayed inside the old range, at $402,000.
Is Quarry Street's new store licensed?
Not provable from the state's public lookup: it lists only the two original stores. An amendment dated February 3, 2026 adding both new stores is in document imaging, but the scan reads at 0.62, under the 0.80 floor, so the analyst was asked.
Which EDD files are due in 30 days and still need an analyst?
10 files in the next 30 days are not yet with an approver, and 1 is overdue: Harbor Lane Food Mart, waiting on its 2025 tax return and escalated to the BSA Officer on October 16.
Build the FDIC examiner pack for Quarry Street
Ready to build for an FDIC examiner: the memo with every source, the declared band and twelve months of activity, the license and registration records, the examiner read and how each weak claim was closed, the approvals with reason codes, and the threshold change.
13 screens from the working solution, on its sample data. Pick one to see it large.
Which customers get enhanced due diligence, who signs and how fast are settings, and a change applies only after a second administrator approves it.
| Setting | Default | Choose from |
|---|---|---|
| Agents start the annual file | 45 days before the due date | 60 days or 30 days |
| Analyst completes the file | 20 business days from the agents' hand-off | 15 business days |
| BSA Officer and Chief Risk Officer approve | 5 business days each | 3 business days |
| Escalation | To the BSA Officer 10 days before due; to the CRO and the committee report at the due date | 7 days before; 5 days after the due date |
| Chief Risk Officer approves | Money services businesses, third-party payment processors and every exit | Set per customer category in the EDD policy |
| Document read confidence | 0.80 | Below it, the agents ask the analyst instead of asserting |
| Retention | 5 years after the account closes | 7 years after closing (31 CFR 1010.430) |
| Masking and restricted matters | Taxpayer IDs and account numbers masked to the last four; suspicious activity decisions for the BSA Officer only | Always on |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our arithmetic, with the split shown (600 annual reviews at 4.5 hours, the midpoint of three to six hours a file) · “typical” = published rules (31 CFR 1022.380: FinCEN MSB registration renews every two years). Context: FFIEC BSA/AML Examination Manual, customer sections updated December 1, 2021; Interagency Interpretive Guidance on Providing Banking Services to Money Services Businesses, April 26, 2005; 31 CFR 1010.430 (five-year retention); 31 CFR 1020.320(e) (SAR confidentiality). Tessaly Community Bank, its customers, the people named on this page and every number, license and registration on the screens are fictional: characters and sample data in the working solution.
Enhanced Due Diligence (EDD) Review is a workflow for a bank's BSA team in which agents build the enhanced due diligence file for each high-risk customer: they compare the activity the customer declared with what it actually did, draft a memo with a source on every sentence, and read it back the way an examiner would. The BSA analyst answers what the agents could not settle and submits, and the BSA Officer, and for the relationships the bank's policy names the Chief Risk Officer, approve before anything is written to a system.
When the bank's own risk assessment rates the customer high risk. The FFIEC BSA/AML Examination Manual discusses money services businesses, cash-intensive businesses, nonresident aliens, politically exposed persons, charities, independent ATM operators and third-party payment processors, but since December 2021 no type is high risk by label alone. In the solution, the bank's EDD policy sets which categories start a file, and a customer can be recorded as standard customer due diligence with a reason.
The 2005 interagency guidance on banking money services businesses sets minimum steps: apply the customer identification program, confirm FinCEN registration, confirm state licensing, confirm agent status and assess the risk. The memo template in the working solution adds source of funds, activity versus expectation, adverse media, the site visit and the recommendation, and every sentence cites the document it came from.
The Activity Analyst draws the range the customer declared as a shaded band and the last twelve months as dots, for cash ordered, checks deposited and wires. Each month outside the band needs a cited cause, every dot opens its record in the core banking system, and the agents propose a new range that a person approves.
The working solution's policy reviews High-risk customers every year. The agents start each annual file 45 days before it is due, files escalate to the BSA Officer 10 days before the due date and to the Chief Risk Officer and the committee report at the due date, and the BSA Officer can reassign, start or extend files in bulk.
People decide. The agents build, cite and ask, and may not approve, close an account, send a notice, change a customer record or change a threshold. The analyst submits as maker, the BSA Officer approves or returns with a reason code, and an analyst can never approve her own file.
The solution is built to prevent it. Relationship managers never see alerts, monitoring details or reports, every request and exit notice is checked for words that could reveal monitoring, and suspicious activity decisions are visible only to the BSA Officer.
The Agentic Solution Engine builds and deploys it from your EDD policy, your memo templates and your systems, and it goes live once every quality gate has passed. A usual first step is a sample: we run it on a set of your past EDD files and a year of their activity and compare its memos with the ones you approved.
Every customer file kept current every day, with only the sections that changed refreshed.
1-min demoKYC RemediationBack-book files made current from records you already hold, asking members only for gaps.
1-min demoDeposit Account OpeningClean applicants open in minutes; every referral says why and is decided the same day.
1-min demoWe'll run Enhanced Due Diligence (EDD) Review on a sample of your own EDD files and a year of their activity.