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QA Framework for CDD and EDD Compliance

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Staying compliant with Enhanced Due Diligence (EDD) and Customer Due Diligence (CDD) regulations requires a streamlined QA process that evaluates every customer interaction. MaestroQA supports financial institutions by ensuring regulatory compliance through precise monitoring, agent coaching, and audit-ready reporting.

How the QA Framework Works

Comprehensive Monitoring: Ensure customer identity verification, beneficial ownership checks, and accurate risk assessments.

Targeted Reviews: Evaluate high-risk transactions, business account openings, and customer risk profile updates.

Actionable Insights: Generate compliance reports, flag gaps, and inform agent training programs.

Key Compliance Areas

Understanding the key areas of compliance is essential for building a robust QA process. Below, we’ve highlighted core regulatory requirements and how MaestroQA’s tailored QA framework helps meet them through precise monitoring, agent coaching, and detailed reporting.

Requirement
Focus Areas
QA Checklist
How We Help
BSA/PATRIOT Act: Customer Identification Program (CIP)
  • Collecting and verifying customer details (name, DOB, address, ID)
  • Validating identity documents
  • Completing sanctions screening
  • Did the agent collect and verify required details?
  • Were sanctions screenings conducted and documented?
  • Review account opening conversations monthly.
  • Flag missing or incomplete records.
FinCEN CDD: Beneficial Ownership Verification
  • Identifying individuals with >25% ownership stakes
  • Verifying control person identity
  • Was ownership verified and documented?
  • Were account updates correctly recorded?
  • Audit business account conversations for accuracy.
  • Track ownership verification rates.
FinCEN CDD: Customer Risk Understanding
  • Nature of business and transaction patterns
  • Accurate risk level assessments
  • Was customer risk accurately classified?
  • Were risk profile updates documented?
  • Monitor account reviews for proper risk categorization.
  • Audit customer risk escalation handling.
FATF: Ongoing Due Diligence
  • Regular customer reviews
  • Transaction monitoring
  • Were periodic reviews conducted on time?
  • Was transaction activity assessed and documented?
  • Conduct periodic audits of monitored transactions.
  • Ensure escalations are documented accurately.
EU AMLD: Enhanced Due Diligence for High-Risk Customers
  • Source of funds verification
  • Senior management approval
  • Was the source of funds validated?
  • Were high-risk approvals logged correctly?
  • Audit high-risk interactions for thoroughness.
  • Verify escalation approvals are properly documented.
Focus Areas
QA Checklist
How We Help
BSA/PATRIOT Act: Customer Identification Program (CIP)
  • Collecting and verifying customer details (name, DOB, address, ID)
  • Validating identity documents
  • Completing sanctions screening
BSA/PATRIOT Act: Customer Identification Program (CIP)
  • Did the agent collect and verify required details?
  • Were sanctions screenings conducted and documented?
BSA/PATRIOT Act: Customer Identification Program (CIP)
  • Review account opening conversations monthly.
  • Flag missing or incomplete records.
FinCEN CDD: Beneficial Ownership Verification
  • Identifying individuals with >25% ownership stakes
  • Verifying control person identity
FinCEN CDD: Beneficial Ownership Verification
  • Was ownership verified and documented?
  • Were account updates correctly recorded?
FinCEN CDD: Beneficial Ownership Verification
  • Audit business account conversations for accuracy.
  • Track ownership verification rates.
FinCEN CDD: Customer Risk Understanding
  • Nature of business and transaction patterns
  • Accurate risk level assessments
FinCEN CDD: Customer Risk Understanding
  • Was customer risk accurately classified?
  • Were risk profile updates documented?
FinCEN CDD: Customer Risk Understanding
  • Monitor account reviews for proper risk categorization.
  • Audit customer risk escalation handling.
FATF: Ongoing Due Diligence
  • Regular customer reviews
  • Transaction monitoring
FATF: Ongoing Due Diligence
  • Were periodic reviews conducted on time?
  • Was transaction activity assessed and documented?
FATF: Ongoing Due Diligence
  • Conduct periodic audits of monitored transactions.
  • Ensure escalations are documented accurately.
EU AMLD: Enhanced Due Diligence for High-Risk Customers
  • Source of funds verification
  • Senior management approval
EU AMLD: Enhanced Due Diligence for High-Risk Customers
  • Was the source of funds validated?
  • Were high-risk approvals logged correctly?
EU AMLD: Enhanced Due Diligence for High-Risk Customers
  • Audit high-risk interactions for thoroughness.
  • Verify escalation approvals are properly documented.

Achieving full compliance requires more than monitoring individual processes. A complete QA strategy includes creating specific rubrics, sampling relevant conversations, grading interactions against defined requirements, and tracking compliance trends. By identifying training needs, documenting findings, and generating comprehensive compliance reports, financial institutions can strengthen their compliance posture while continuously improving agent performance.

Real-World Compliance Scenarios

Compliance extends beyond written policies and requires practical application in real-world scenarios. Below are examples showing how MaestroQA’s QA framework helps financial institutions manage compliance with EDD and CDD requirements in day-to-day operations.

1

Customer Identification Monitoring (CIP)

Example: New Account Opening at an Online Bank
QA Actions: Ensure agents collect valid ID, verify addresses, and complete sanctions screenings.

2

Beneficial Ownership Verification (FinCEN CDD)

Example: Business Account Setup for a Corporate Client
QA Actions: Verify ownership structures, authorized signers, and document accuracy.

3

High-Risk Transaction Monitoring (EDD)

Example: Cryptocurrency Exchange Transactions
QA Actions: Validate source of funds, approve flagged transactions, and escalate concerns promptly.

4

Risk Assessment Documentation (CDD)

Example: Investment Platform Account Reviews
QA Actions: Review business industry risks, transaction patterns, and document regular risk updates.

Example Scorecard Criteria

To ensure thorough and consistent evaluations, custom QA scorecards should include criteria tailored to specific compliance processes like Enhanced Due Diligence (EDD) and Customer Due Diligence (CDD). The following examples outline key questions that help assess agent performance, from verifying customer information to monitoring high-risk transactions. These criteria provide a framework for measuring how well agents follow critical compliance procedures, helping organizations mitigate risk while ensuring regulatory adherence.

Customer Identification Monitoring (CIP) Scorecard

  • Did agent collect all required ID documents?
  • Was beneficial ownership verified and documented?
  • Were EDD steps followed for high-risk customer?
  • Did the agent verify that the customer’s address matches the documents provided?
  • Did the agent cross-reference the customer’s name against relevant sanctions or watch lists?
  • Did the agent ask about the customer's expected account activity to assess potential risk factors?

SAR Quality Control Scorecard

  • Did the agent ask about the customer's source of funds?
  • Did the agent document the purpose of the transaction clearly and accurately?
  • Did the agent note any signs of customer hesitation, concerns, or unusual behavior during the interaction?
  • Did the agent properly escalate the case to the compliance team when required?
  • Did the agent include all relevant transaction details needed for accurate record-keeping and compliance review?

High-Risk Transaction Monitoring (EDD) Scorecard

  • Did the agent validate the source of funds for the high-risk transaction, ensuring compliance with regulatory requirements?
  • Did the agent correctly review and approve flagged transactions according to established procedures and risk thresholds?
  • Did the agent escalate any suspicious activities or concerns related to the transaction to the appropriate compliance team promptly?

Risk Assessment Documentation (CDD) Scorecard

  • Did the agent collect all required corporate structure documents from the business?
  • Did the agent verify the identity and authorization of all listed signers on the business account?
  • Did the agent assess the industry-specific risks associated with the business account?
  • Did the agent inquire about the expected transaction volumes for the business account?
  • Did the agent identify and document any international business relationships linked to the account?

Tools for Compliance Success

A strong QA framework requires robust tools that track performance, evaluate compliance, and generate audit-ready reports. MaestroQA’s platform offers essential tools that make compliance more efficient and transparent.

Custom Scorecards: Define compliance-specific evaluation criteria for EDD and CDD processes, ensuring agents follow customer verification, ownership checks, and risk assessment protocols.

Calibration Sessions: Weekly calibration sessions ensure scoring consistency through cross-team reviews.

Performance Dashboards: Monitor real-time compliance metrics.

Audit-Ready Reporting: Generate compliance evidence, track historical performance, document quality control processes, and prepare for regulatory examinations

Coaching and Training: Equip agents with the skills needed for EDD and CDD compliance through targeted coaching and training programs focused on common regulatory challenges.

Conclusion

Achieving EDD and CDD compliance requires a proactive approach. MaestroQA delivers scalable, audit-ready quality management solutions that reduce regulatory risks and streamline compliance monitoring.

Contact us to learn more!

Legal Disclaimer: The information provided on this webpage is for informational purposes only and does not constitute legal advice. For specific advice regarding compliance with CCA or CDA regulations, please consult a qualified attorney.