Source of Funds
Source of funds is the documented origin of the specific money moving through an account: where a given deposit or the working capital actually came from. It differs from source of wealth, which explains how a person or company built their overall assets over time.
Unexplained inbound funds are among the top reasons a high-risk account gets frozen mid-life, and clearing a hold usually means producing documentation a firm should have gathered at onboarding. Having source-of-funds evidence ready before the first large transaction avoids a freeze that can lock 100% of a balance for weeks.
Customer Due Diligence is the baseline set of checks a regulated firm performs on every customer: verifying identity, understanding the purpose of the relationship, and assessing the risk they present.
Enhanced Due Diligence is the deeper set of checks a firm applies to higher-risk customers: politically exposed persons, high-value clients, or those in high-risk jurisdictions.
Know Your Business is the due-diligence process banks, EMIs, and acquirers run to verify a corporate applicant: beneficial ownership, incorporation documents, source of funds, and the nature of the business itself.
Anti-Money Laundering is the framework of laws, controls, and monitoring a regulated firm must run to detect and prevent the movement of illicit funds.