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Banks Favor Risk-Based AML Programs, But Need Guidance

By Brian Monroe

Financial institutions and regulators agree that risk-based anti-money laundering (AML) programs allow institutions the flexibility to guard against financial crime without inconveniencing customers or leaving blueprints for criminals to master. Yet a survey of 34 government entities and large banks by the Financial Action Task Force (FATF) suggests they don't agree on how individual institutions should adopt the approach, whereby banks identify their risks then allocate AML resources to the most vulnerable areas. The FATF, a Paris-based organization that sets international AML standards, asked regulators and financial firms in 16 jurisdictions to define the key elements of a risk-based approach,...

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