Statement on inspection in Facit Bank A / S (money laundering area)
On 14 and 15 October 2021, the Danish Financial Supervisory Authority inspected Facit Bank A / S. The inspection was an investigation of the money laundering area. The inspection included an examination of the company’s risk assessment, risk classification of customers, customer knowledge, customer knowledge procedure as well as the investigation and notification obligation.
Risk assessment and summary
Facit Bank A / S is a bank which in August 2019 received a license to operate a bank in Denmark. The bank has one branch in Norway and one in Sweden. The bank’s business model consists of offering unsecured consumer loans to private customers residing in Denmark, Norway and Sweden both directly via Facit Bank A / S and through the sister company 3C Retail A / S or external brokers. The bank also offers deposits.
The Danish Financial Supervisory Authority assesses that the company’s inherent risk of being used for money laundering or terrorist financing is normally assessed in relation to the average of financial companies in Denmark. In the assessment, the Danish Financial Supervisory Authority has placed special emphasis on the bank having a simple business model. Conversely, the bank has exclusively sub-customer relationships and sees itself as a digital bank, which is why all the bank’s customers are onboarded without a physical presence in the bank.
Based on the inspection, the following areas have given rise to supervisory reactions.
The bank has been instructed to revise its risk assessment so that it contains an assessment of all the risks that the bank has identified in its business model.
The bank has been instructed to revise the business procedure for risk classification of customers in order to ensure that the bank can make a concrete and documented risk assessment of the bank’s individual customer relationships.
The bank has been ordered to carry out stricter customer due diligence procedures in the customer relationships where the bank assesses that there is an increased risk of money laundering or terrorist financing.
Finally, the bank has been reprimanded for not having investigated the origin of the funds before 2020 and obtained documentation for this, so that the bank has been able to assess whether there was a suspicion or reasonable reason to believe that a transaction, funds or activity has or has been linked to money laundering or terrorist financing, and should therefore be notified to the Money Laundering Secretariat.