Source of Funds is the origin of the specific money entering an account; Source of Wealth is the origin of the customer’s entire net worth. Both are EDD requirements, but they are documented and verified differently — and regulators routinely find that firms confuse the two. This guide explains the distinction, the documentation each requires, and how to operationalize collection at scale.
When EDD is required, what source-of-funds and source-of-wealth investigation actually looks like in practice, and how to evidence enhanced due diligence to a regulator.
EDD applies when standard checks aren’t enough — politically exposed persons, high-risk jurisdictions, opaque ownership structures. This guide details the FATF triggers, the deeper documentation EDD demands, and how to execute it without paralysing onboarding.
Customer Due Diligence is the FATF-mandated process of identifying customers, understanding their risk, and monitoring them over time. This guide covers the three CDD tiers — simplified, standard, and enhanced — and the six steps every compliance team should run.
