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.
You may be interested in…

Solving the Shell Company Conundrum
New Decision Intelligence technology is allowing banks to identify illicit shell company networks at scale to crack down on money laundering and fraud.

3 Talented Quantexans Recognized in the 2023 Women of the Channel List
CRN’s 2023 Women of the Channel honors Tina Gravel, Donna Goodwin and Sheryl Wharff of Quantexa.

This Powerful New Solution Provides a Single View of Customers in Minutes
Quantexa is innovating quickly to test a faster, more streamlined way to deliver Entity Resolution at scale by bundling key capabilities of their Decision Intelligence Platform (DI) in a new product called ER Accelerate.

Quantexa Positioned as a Technology Leader in Quadrant’s 2023 AML SPARK Matrix
Quantexa has been named a 2023 Technology Leader in Quadrant Knowledge Solutions’ Anti-Money Laundering (AML) SPARK Matrix.

In Context: Enhancing KYC and AML Efforts With Innovative Technology
Today’s banking environment is rapidly evolving thanks to new technologies that are allowing organizations to get a full, 360-degree view of their customers. We caught up with Scott Nathan from Citi on the challenges the banking industry faces today and how savvy financial institutions are using technology to meet those challenges.

4 Areas of Focus for Financial Services Firms Following the FCA Review
The FCA’s review of firms’ Consumer Duty implementation plans highlights the positive progress made by some, but also the deficiencies in the approaches of others.
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.

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

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.

Healthcare
Reduce the tax gap, identify fraud and non-compliance, and operate as efficiently as possible with limited resources.

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

Know Your Customer
Reduce significant manual effort across onboarding, refreshes and remediation. Automate checks, implement continuous monitoring, and focus on contextual decision making.

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.