The inspection included the bank’s risk assessment, policies, procedures and internal controls as well as customer knowledge procedures, including surveillance of private customers and corporate customers.
Risk assessment and summary
Sparekassen’s business model is based on being a significant bank in its local area for private customers, small and medium-sized enterprises, public institutions, cultural institutions and leisure associations. The savings bank limits its business to basic and simple products and does not have complex or speculative financial products.
The Danish Financial Supervisory Authority considers that the savings bank’s inherent risk of being abused for money laundering or terrorist financing is normal to high in relation to the average of financial companies in Denmark. In the assessment, special emphasis has been placed on the Savings Bank offering a number of financial products for both private customers and corporate customers. Conversely, Sparekassen restricts its business to traditional financial products and primarily takes its starting point in its local area with customers who are resident in Denmark.
Sparekassen has added additional resources to the money laundering area and initiated a money laundering project, which focuses on several areas, including onboarding of corporate customers.
On the basis of the inspection, however, there are a number of areas that give rise to supervisory reactions.
The Danish Financial Supervisory Authority found that the Savings Bank’s risk assessment does not adequately contain a documented analysis of the Savings Bank’s risk factors and does not adequately address the risk that the Savings Bank will be abused for financing terrorism. On this basis, the savings bank is ordered to revise the risk assessment accordingly.
In addition, the Savings Bank is required to revise its money laundering policy so that it clearly identifies and delimits the risks the Savings Bank wishes to assume in the money laundering area.
The savings bank also receives an order to ensure that adequate customer knowledge procedures are implemented for all customers, including obtaining information on purpose and intended nature regarding the customer relationship for all customers, as well as obtaining information on real owners for all corporate customers.
In addition, the Savings Bank is required to ensure that the information on purpose and intended nature can be used by the Savings Bank’s electronic surveillance.
In addition, the Savings Bank is required to obtain documentation for customers’ information in connection with investigating suspicious transactions.
Finally, the Savings Bank is instructed to ensure that there is the necessary independence between its compliance function and the money laundering officer, including that there is no personal association between the Savings Bank’s compliance manager and the money laundering employee.