New Risk Factor Guidelines to Strengthen Financial Crime Detection
Written by Matthew Long
|
Published: 22nd Mar 2021
The European Banking Authority (EBA) recently published its updated money laundering (ML) and terrorist financing (TF) risk factor guidelines.
In this updated version, the EBA strengthens the requirements on both individual and business-wide risk assessments and customer due diligence measures, including new guidance on the identification of beneficial owners and the use of “innovative solutions to identify and verify customers’ identities”, amongst other updates.
In addition, the EBA included new sectoral guidelines for crowdfunding platforms, corporate finance, account information service providers, and payment initiation services providers and firms providing activities of currency exchange offices. The revised guidelines also provide more details on terrorist financing risk factors.
Risk sensitive measures
Perhaps not surprisingly, the EBA noted respondent feedback concerning the challenges of complying with anti-money laundering/combatting the financing of terrorism (AML/CFT) requirements whilst ensuring the likes of financial inclusion. This highlights the challenges that come with the provision of financial services to, “individuals from low income, unserved and underserved groups”.
Addressing this, the EBA reinforced that there is no requirement for financial institutions to “discontinue services to entire categories of customers that they associate with higher ML/TF risk (i.e. de-risking).
Guidelines do not prevent firms from establishing a correspondent banking relationship with a respondent situated in a high-risk third country, provided that the risk is mitigated through enhanced due diligence measures.
The European Banking Authority.
Contextual, risk-based decisioning
Underpinning this and noted throughout the guidelines are the principles of “taking a holistic view,” applying “risk-sensitive decisions” and taking into account “wider, contextual factors” that could influence ML/TF risk profiles. The guidelines also highlight the usage and application of “weighted risk scores” and “mitigating factors” to ensure the application of genuine risk-based decisioning.
The above principles are all inherent in the compliance and financial crime solutions provided by Quantexa, known collectively as Contextual Decision Intelligence. This concept of automated Contextual Decision Intelligence, powered by world-leading entity resolution and network generation, is now implemented in more than 70 countries.
Enhance financial crime risk detection and meet your compliance requirements with Quantexa’s Anti-Money Laundering solutions.
You may be interested in…
Contextual Monitoring for Money Laundering Risk Within Financial Markets
FCA’s recent report observed that a contextual monitoring approach can help organizations improve their risk detection capabilities – and here’s why.
Managing the Rise of Mergers & Acquisitions in Insurance with a Strategic Approach to Data Integration
Establishing a strategic approach to data integration is key to managing the steady rise of M&A in insurance, and accelerating your digital transformation journey – here’s how.
Contextual Monitoring: The New Standard for FinCrime and Fraud Detection and Investigations
As the cracks in the traditional approaches to financial crime and fraud detection and investigation deepen, a period of seismic disruption is underway – and Contextual Monitoring is at its forefront. Learn more about Quantexa’s innovative contextual monitoring platform, Syneo – designed to disrupt the current AML landscape by offering a new ‘investigate to detect’ approach based on actionable intelligence.
Closing the “Tax Gap” & Introducing New Cryptocurrency Reporting Rules with Advanced Analytics
The world’s largest tax collection agency – the IRS – is proposing an ambitious upgrading plan, including major investments in data analytics and technology. Learn more about the global impact of upgraded analytic capabilities here.
The Big Impact of Poor Data Quality You Can’t Ignore
Data quality issues never seem to go away. Learn how to stop running from chronic data quality issues and bring your data—and your business—under control.
Enterprise Scalability: The Most Important Capability for Entity Resolution
Overcoming data challenges and harnessing the value of big data starts with building a reliable and accurate data foundation. Entity resolution provides the foundation for better decision-making.
Better decisions start here
See how our Contextual Decision Platform transforms every operational decision you make.
Related Solutions
Tax Authorities
Reduce the tax gap, identify fraud and non-compliance, and operate as efficiently as possible with limited resources.
Anti-money laundering
Reveal hidden risks and detect criminal activity faster. Reduce false positives to manage the cost of compliance. And improve investigations to make faster and more consistent decisions at scale.
Customs Agencies & Border Control
Contextual Decision Intelligence enables faster decisions, increased revenue collection and enhanced compliance. The Quantexa platform enables Customs and Border agency teams to analyze data successfully, automate and accelerate decision-making, and achieve improved results.
Fraud
Identify potentially fraudulent activity by looking at people or transactions in isolation. Understand the context surrounding the organizations you do business with to make fast, accurate decisions.
Fraud, Waste & Abuse
Empower your team with the best tools available for today’s challenges to identify and prevent fraud, waste and abuse with contextual decision intelligence software.
Credit Risk
Understand your customers, their business structures and supply chains. Make better lending decisions, faster. And support digital risk transformation.
Know Your Customer
Reduce significant manual effort across onboarding, refreshes and remediation. Automate checks, implement continuous monitoring, and focus on contextual decision making.
Customer Intelligence
Generate a complete view of the context around your customers and prospects to build better relationships, reduce attrition and find hidden opportunities.
Revolutionize your Financial Crime and Fraud detection with Syneo
Syneo Investigations
Enhance the efficiency, effectiveness and consistency of your operational and complex investigations to empower your teams to expose and understand risk faster.
Master Data Management
Connect all data—internal and third party—to create a joined-up, contextual view of all the relationships between your customers and every other domain.
Compliance
See how we help to reduce costs and improve coverage for financial crime compliance.
CDO
See how our platform uses contextual analysis to turn data into a high value asset.
CIO
See how our platform uses financial crime technology to enhance your existing IT ecosystem.
Syneo for Contextual Monitoring
Reveal hidden risks and detect criminal activity faster. Reduce false positives to manage the cost of compliance. And improve investigations to make faster and more consistent decisions at scale.
Unified CRM Solution
Growth and Retention
Contextual Engagement
Generate a complete view of the context around your customers and prospects to build better relationships, reduce attrition and find hidden opportunities.
Data Management
Connect all data—internal and third party—to create a joined-up, contextual view of all the relationships between your customers and every other domain.
Connected Customer View
Generate a complete view of the context around your customers and prospects to build better relationships, reduce attrition and find hidden opportunities.