Seven bids for strengthened fight against money laundering
Better tools for customer awareness, increased access to government data and sharing of risk flags between financial institutions. These are some of the proposals in the Danish Financial Supervisory Authority’s new report, where the Authority provides a number of examples of how the fight against money laundering can be improved even through increased customer knowledge. The proposals are now being sent out for consultation.
The report presents seven initiatives that the Danish Financial Supervisory Authority considers to have significant potential to support more efficient customer due diligence procedures for companies and individuals required by the Money Laundering Act. The initiatives are:
- Support the sector’s work to establish common shared infrastructure to implement customer knowledge procedures (so-called KYC utilities) through dialogue and decision-making on how the requirements of the Money Laundering Act can be complied with in such an infrastructure
- Establishment of a mechanism for validation of company data in CVR
- Use of the MitID solution to verify identities
- Establishment of a digital solution in the public sector for the implementation of PEP screenings
- Joint sector collaboration in relation to the identification of generalized scenarios in connection with transaction monitoring
- Increased access to government data
- Sharing risk flags between required entities
The overarching consideration in the report is how cooperation between authorities and the sector can be improved in the area of money laundering, especially through increased use of technology. The Danish Financial Supervisory Authority’s focus has therefore been on the extent to which the available digital infrastructure in Denmark can be better utilized today, as well as the opportunities for expanding the infrastructure.
“We all have an interest in making the fight against money laundering and terrorist financing as effective as possible. This also requires that we give the companies that are the front line in this fight the right tools, ” says the Danish FSA’s Deputy Director Rikke-Louise Ørum Petersen, who is responsible for money laundering.
However, increased use of technology in the field of money laundering comes with both advantages and disadvantages. The report therefore also focuses on the necessary trade-offs for the various initiatives, where the increased efficiency in relation to personal data considerations is central.
The report has been prepared by the Danish Financial Supervisory Authority on the basis of the political agreement ‘Strengthening efforts against financial crime’ as adopted by a broad majority in the Folketing in 2019. It appears that the Danish Financial Supervisory Authority must support the financial sector in building common infrastructure that can strengthen companies’ customer awareness processes.
In preparing the report, the Danish FSA has received input from a number of authorities and representatives from the financial sector to ensure that all relevant aspects have been addressed. With the consultation, we want to get even more input, which can be included in the further work with the report’s initiatives.
It should be noted that the report does not deal with measures in relation to a joint transaction monitoring, as a project is underway under the auspices of the Ministry of Trade and Industry in this area.