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Finanstilsynet AML inspection report: LAN & Spar Bank A/S

Statement on inspection in Lån & Spar Bank A / S (money laundering area)

In December 2018, the Danish FSA was on inspection in Lån & Spar Bank A / S. The inspection was an investigation of the money laundering area as part of the ongoing supervision of the bank. The inspection included the bank’s risk assessment, policies, procedures and internal controls, as well as customer knowledge procedures, including private and corporate customer monitoring.

Risk assessment and summary

The bank’s business model is based on traditional banking operations with a significant concentration in the major Danish cities with educational institutions, especially in Copenhagen and the surrounding area.

In addition to its activities in Denmark, the bank has one branch in Sweden. The branch is an Internet bank for Swedish private customers, primarily members of two professional organizations. All customers of the branch are distance customers, and no physical attendance is offered for customers in the branch.

The bank focuses on private customers and, as a starting point, only offers deposit accounts and credits to traders within specific segments, including liberal professions, municipalities, utilities and others. The bank states that it is generally reluctant to offer services to industries and sectors that are outside the traditional clientele.

The Financial Supervisory Authority considers that the bank’s inherent risk of being abused for money laundering or terrorist financing is normal to high assessed in relation to the average of financial companies in Denmark. In the assessment, special emphasis is placed on the fact that the bank only offers products to more specific segments of traders and on the composition of customers who are primarily resident in Denmark, and a significant part of which are members of organizations with which the bank has loyalty customer agreements. Conversely, the bank is nationwide, offers all traditional financial products and has a branch in Sweden, which has only distance customers.

In recent years, the bank has added additional resources to the money laundering area and has focused on several areas, including the special development of additional scenarios for monitoring purposes.

Based on the inspection, a number of supervisory responses have been provided.

The Danish Financial Supervisory Authority found that there were similarities between the bank’s money laundering officer and the compliance officer. In a bank of this size, the fact that the compliance function can perform the required checks correctly and independently means that there cannot be this coincidence. Against this background, the bank is instructed to ensure that there is the necessary independence.

The Bank is required to ensure that it has adequate controls to include independent risk management controls, knowledge management procedures, investigative, listing and reporting obligations, information retention, employee screening and internal controls for effective prevention, mitigation and risk management. for money laundering and terrorist financing.

Finally, the bank is instructed to ensure that documents, data or information about private customers are regularly updated.

Link:

Finanstilsynet Notice

Categories: Anti-Money Laundering Finanstilsynet Updates Inspection Reports

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