According to estimates, 16 billion Euros of money is laundered every year in the Netherlands. This funding is used in activities such as drug trafficking, human trafficking, child pornography, and extortion. Criminals use multiple banks to hide, making it difficult for banks to protect themselves.
Five Dutch banks -ABN AMRO, ING, de Volksbank, Triodos Bank, and Rabobank- decided to establish Transaction Monitoring Netherlands (TMNL) in the collective to fight against money laundering and the financing of terrorism. The purpose of the organization is to contribute to banks' transaction monitoring activities. TMNL will focus on identifying unusual patterns in payment traffic that individual banks cannot identify.
The Netherlands' Big Five Banks
ABN Amro Bank
Founded in 1991, ABN AMRO Bank's head office is in Amsterdam. ABN AMRO is the third-largest Dutch bank. In 2009, the original ABN AMRO was acquired and distributed by a banking consortium consisting of the Royal Bank of Scotland Group, Santander Group, and Fortis. It was then established in its current form.
ABN AMRO Bank has offices in 15 countries. Its operations include a private banking division that focuses on high-net-worth clients in 14 countries and commercial and merchant banking operations that play a significant role in the energy, commodities, and transportation markets brokerage, clearing, and custody.
ING means "Internationale Nederlanden Groep". ING Bank is an Amsterdam-based financial services company founded in 1991 through a merger. Its main activities are retail banking, direct banking, commercial banking, investment banking, wholesale banking, private banking, asset management, and insurance services. ING bank is one of the world's largest banks, with a total of $ 1.1 trillion in assets.
The Dutch ING bank paid 775 million euros in September 2018 for mismatches that allowed companies to launder hundreds of millions of euros and pay bribes for six years, including a Curacao underwear company and a Russian mobile phone operator.
The bank's flaws came to light after the Dutch prosecutor investigated the perpetrators of four companies that had accounts with ING, including a $ 55 million bribe paid by the Russian mobile operator VimpelCom to the daughter of the president of Uzbekistan.
De Volksbank is a Dutch public bank. The bank is a retail bank that offers financial products to companies and individuals. It was called SNS Bank before it was restructured in 2017. The Dutch government acquired the bank and its principal shareholder in 2013. In 2016, SNS Bank was the fourth-largest bank in the Netherlands in terms of total assets.
In 2019, the Dutch government wanted more industry participation in another pilot project, the Fintelalliance, which in its original setup, enabled FIU analysts and compliance staff from De Volksbank to swap jobs for several months.
Triodos Bank NV
Triodos Bank NV, headquartered in the Netherlands, has branches in Belgium, Germany, France, the United Kingdom, and Spain. It was established in 1980. It was founded with a mission to help create a society that protects and supports human dignity. The bank finances companies that it believes in adding cultural value and benefit both people and the environment. As of 2020, Triodos Bank has 721,000 customers worldwide.
The headquarters of Rabobank, which was established in 1985, is in the Netherlands. The bank's primary focus is the food and agriculture trade. Rabobank is the second-largest bank in the Netherlands in terms of total assets.
Rabobank paid a $ 1 billion fine in 2013 for fraud at benchmark interest rates. With this penalty, it became the fifth bank to have had a scandal that helped shake confidence in the industry. After the fine, the bank said they would pay 774m euros to the US, British and Dutch regulators. After the incident, Chief Executive Officer Piet Moerland resigned.
What is TMNL and How Does It Work?
TMNL's system enables financial institutions to monitor and analyze transactions across different banks and financial institutions. This helps them identify suspicious transactions and prevent money laundering and terrorist financing. By pooling their resources, financial institutions can achieve better monitoring coverage, reduce compliance costs, and increase the effectiveness of their transaction monitoring.
TMNL's system uses advanced algorithms and machine learning technologies to detect patterns and anomalies in transaction data. This helps financial institutions to identify unusual transactions and behaviors that may indicate financial crimes. TMNL also provides real-time alerts and notifications to financial institutions, enabling them to take prompt action to prevent financial crimes.
In addition to transaction monitoring, TMNL also offers a range of other services to help financial institutions achieve compliance with Dutch regulations. These services include customer due diligence (CDD), risk assessments, and suspicious transaction reporting. By offering a comprehensive range of services, TMNL provides a one-stop-shop for financial institutions seeking to achieve compliance with Dutch regulations.
In addition to the banks fulfilling their responsibilities as gatekeepers, a national chained approach effectively deals with money laundering and terrorist financing. Banks work closely with government partners such as the Ministry of Finance, Justice, and Security, FIOD, and the Financial Intelligence Unit (FIU). The formation of TMNL has been linked to the Government's Money Laundering Action Plan, announced in mid-2019. As part of this plan, an amendment to the Anti-Money Laundering and Counter-Terrorism Financing Act (Wet tegen witwassen en terrismefinanciering or 'Wwft') is envisaged to enable full-scale batch tracking.
How Can Sanction Scanner Transaction Monitoring Product Help Bank?
Sanction Scanner's Transaction Monitoring product help banks by providing a powerful tool to monitor their customers' transactions in real-time. This product uses advanced algorithms to analyze transactional data, including the originator and beneficiary details, transaction amount, and frequency, to identify suspicious patterns and behaviors.
With this tool, banks can quickly detect and flag potential money laundering activities, such as structuring, layering, and smurfing. They can also monitor for other types of financial crimes, such as terrorist financing and fraud. By detecting suspicious activities early on, banks can prevent financial losses, regulatory fines, and reputational damage.
The product also offers customizable rules and scenarios, allowing banks to tailor their monitoring program to their specific needs and risks. It is constantly updated with the latest regulatory requirements and can adapt to changes in the global risk landscape, ensuring that banks remain compliant with the latest regulations.
Additionally, Sanction Scanner's Transaction Monitoring product offers a user-friendly interface, making it easy for bank personnel to use and analyze the results. The tool also generates automated alerts for potential suspicious activities, streamlining the investigative process for bank compliance teams.