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Finanstilsynet Inspection Report for PenSam Bank A/S

Statement on inspection in PenSam Bank A / S (money laundering area)

In December 2019, the Danish Financial Supervisory Authority inspected PenSam Bank A / S.

The inspection was an investigation of the money laundering area as part of the ongoing supervision of the company. The inspection included the company’s risk assessment, policies, business procedures, customer due diligence procedures, customer monitoring and notifications to the Money Laundering Secretariat.

Risk assessment and summary

PenSam Bank A / S is a Danish bank whose primary customers are pension customers in PenSam and employees on the FOA agreement. However, the bank also has customers in addition to these. 

The bank offers simple banking services / banking products, which mainly consist of salary accounts, pension accounts, child savings, simple deposits / savings products, consumer loans and car loans. 

The bank has a very limited amount of corporate customers. 

The bank is internet based and has no branches. However, the bank holds physical meetings with customers at FOA’s local offices. 

The Danish Financial Supervisory Authority assesses that the bank’s inherent risk of being used 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 bank’s customer portfolio consisting exclusively of distance customers. Conversely, the bank only offers simple financial products and the bank’s customers are mainly private customers residing in Denmark. 

Based on the inspection’s observations, there are a number of areas that give rise to supervisory reactions.

The Danish Financial Supervisory Authority notes that the bank in its risk assessment has not made the necessary assessment of the inherent risk that the bank will be used for money laundering and terrorist financing in relation to the bank’s customer types, products, services, size and geographical areas of activity. The bank is therefore instructed to revise its risk assessment. 

The Danish Financial Supervisory Authority notes that the bank’s money laundering policy has not been prepared in such a way that it constitutes a strategic management tool for management. Against this background, the bank will be instructed to revise its money laundering policy.

The Danish FSA also finds that the bank does not carry out sufficient customer knowledge procedures with regard to certain customer groups. On this basis, the bank is instructed to ensure that it carries out sufficient customer due diligence procedures for all customers and that this can be proven to the Danish Financial Supervisory Authority.   

Furthermore, the Danish Financial Supervisory Authority finds that the bank could not document the customers’ purpose with the business relationships and their intended nature. On this basis, the bank is instructed to assess and, where relevant, obtain information on the purpose and intended nature of the customer relationship, and that this can be documented to the Danish Financial Supervisory Authority. 

The Danish FSA further states that the bank could not prove that the bank conducts stricter customer due diligence procedures on high-risk customers when onboarding. The bank is therefore ordered to ensure that it conducts stricter customer due diligence procedures on customers, where the bank assesses that there is an increased risk of money laundering or terrorist financing, and that this can be reimbursed to the Danish Financial Supervisory Authority. 

The Danish FSA also finds that the bank cannot sufficiently document that the bank regularly updates information about the bank’s customers. On this basis, the bank is instructed to continuously update information about customers and to ensure that this can be documented to the Danish Financial Supervisory Authority. 

In addition, the Danish Financial Supervisory Authority states that the bank’s monitoring of its customers is not based on the risk assessment of the customers as well as the actual circumstances surrounding the customers and the product portfolios that the customers use. On this basis, the bank is instructed to ensure that the bank’s monitoring of customers is in accordance with the bank’s knowledge of customers. 

Furthermore, the Danish Financial Supervisory Authority notes that the bank is not seen to take concrete measures when customers are placed under stricter supervision. The bank is therefore instructed to ensure that the bank carries out stricter monitoring of customers who have an increased risk profile in relation to money laundering and terrorist financing, and that this can be documented to the Danish Financial Supervisory Authority.  

In addition, the Danish Financial Supervisory Authority finds that the bank has not sufficiently investigated all suspicious or unusual transactions, especially in relation to customers who have used their private accounts for business accounts. The Danish FSA finds that business activity must presumably involve transactions that are unusual in relation to the behavior that the bank expected for the private customer in question. The bank is therefore instructed to ensure that the bank investigates suspicious transactions, including that the results of these investigations are noted and stored, and that this can be proven to the Danish Financial Supervisory Authority.

Finally, the Danish Financial Supervisory Authority finds that the bank does not sufficiently fulfill the obligation to immediately notify the Money Laundering Secretariat of suspicious transactions. On that basis, the bank is ordered to ensure that the bank immediately notifies suspicious transactions to the Money Laundering Secretariat.  

Link:

Inspection Report

Categories: Anti-Money Laundering Finanstilsynet Updates Inspection Reports

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