Swiss regulator finds weaknesses in banks’ money-laundering risk analysis

FINMA has now re-examined the risk analyses of more than 30 banks and scrutinised numerous other institutions. Keystone-SDA

Swiss financial institutions have improved their measures against money laundering. According to the financial regulator FINMA, however, weaknesses remain in risk analysis, especially in the case of politically exposed persons, complex company structures and crypto services.

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Although Swiss financial institutions have stepped up measures against money laundering, the Swiss Financial Market Supervisory Authority FINMA believes that more needs to be done. The authority said on Thursday that banks, asset managers and other financial institutions could make even better use of their options, particularly when it comes to assessing and monitoring risks.

Following an investigation in 2023, FINMA has now re-examined the risk analyses of more than 30 banks and scrutinised numerous other institutions. It found that some risks were not recorded in sufficient detail, exceptions to internal requirements were authorised too generously, and warning indicators were insufficiently defined. As a result, problematic business relationships or increased money laundering risks could be overlooked more easily.

Among other things, the supervisory authority is critical of the treatment of politically exposed persons (PEPs), complex company structures and crypto services. In some cases, such areas are not categorised as sufficiently risky, it said.

FINMA is now issuing further instructions and expectations for the so-called money laundering risk analysis, which is intended to determine which risks an institution accepts, which are excluded and how compliance is monitored. According to the supervisory authority, it is the most important instrument for preventing money laundering and terrorist financing.

Translated from German with AI/gw

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