The European Banking Authority (EBA) has stated in its latest review that the European financial sector is vulnerable to money laundering and terrorist financing even though considerable reforms have been adopted in recent years.
ABLB, a Latvian bank, was accused of laundering money by the United States of America, and before that Danske Bank Estonia was charged with laundering 1,4 Billion US Dollars.
The EBA stated that Europe is on the right path, but there is still a long way to achieve a strong banking industry against financial crimes, such as terrorist financing and money laundering.
What Is EBA?
EBA stands for European Banking Authority. It imposes regulations across the continent to fight against money laundering and terrorist financing. EBA also helps companies meet their AML Compliance needs.
EBA regularly releases reports regularly to show AML Compliance Officers how the continent performs against financial crimes.
Key Takeaways from The EBA Report (2022/08)
The report focuses on risk assessment, anti-money laundering, counter financing terrorism, supervision, and enforcement of regulations. The key takeaway was that companies should adopt a risk-based approach faster. The other key takeaways are:
- AML Compliance officers should follow the updates the EBA publishes.
- Companies should have their AML Compliance programs ready to show in case AML regulators want to examine them.
- The EBA provided AML/CFT training to more than 1,500 Europeans across the continent.
- Compliance officers rose in numbers.
- The cooperation between companies and Financial Intelligence Units isn't strong.
- Organizations started strengthening their compliance programs.
- The EU started imposing more penalties related to AML Compliance.
Click here to read the whole EBA report.
What is a Risk-Based Approach?
The risk-based approach is a method used by organizations to detect the risk level of new or current customers. Many factors affect the risk level of laundering money a customer carries, such as location and industry. For example, politically exposed people as customers and transactions from countries with weak AML regulations carry a high risk of money laundering. Know Your Customer, Transaction Monitoring, and Adverse Media Data is one of the products used to build a risk-based approach.
Click here to read more about the Risk-Based Approach.
Challanges AML Compliance Officers Face When Adopting Risk-Based Approach According to EBA
- The complexity of the risk-based approach, such as determining the weight of risk factors.
- Detecting money laundering and terrorist financing risks related to the banking industry.
- Not knowing where to use the resources effectively.
How Sanction Scanner Helps Companies Adopt Risk-Based Approach
Sanction Scanner offers Customer Risk Assessment and Transaction Monitoring Software. Companies can set rules based on their risk-based approach strategy, such as transaction threshold, customers' location, and how politically exposed the customer is. Sanction Scanner's software reduces companies' workload by writing a report paper to companies if any of their rules are getting broken.
Contact us and meet Sanction Scanner's Software that scans organizations and individuals on more than 3,000 Sanction lists, PEP lists, and Adverse Media Data within seconds. The data Sanction Scanner uses covers all countries.