Finding Solutions to the “De-risking” Dilemma and Working Towards Financial Inclusion and Regulatory Clarity
As part of its 16 recommendations to combat money laundering and terrorist financing, the Financial Action Task Force (FATF) set out to establish the risk-based approach as the standard by which financial institutions create their own framework for assessing client risk and adapting their procedures to control those risks. Many argue that policy and guidance interpretations of the risk-based approach has led to unintended consequences, a phenomenon in the international financial community referred to in the pejorative as de-risking: the decision to restrict or withdraw financial services or to decline to establish a relationship to provide financial services in the first place.
Also referred to simply as the termination of business relationships or bank discontinuance, de-risking has left many legitimate businesses and economies with limited or no access to the global financial system, and in some cases has led to humanitarian crises.
Furthermore, the act of de-risking countermands the major goals set forth by FATF and other regulatory jurisdictions in that illicit moneys are no longer being tracked in the financial system as new alternative remittance systems are utilized.
ACAMS, in partnership with a number of prominent organizations such as the World Bank, is working to bring clarity to the de-risking environment and help illuminate the challenges and offer recommendations. The following are essential resources for all interested in a strong and inclusive world economy.
- ACAMS/World Bank Dialogue on De-Risking: Findings and Recommendations
- Dealing with De-Risking: A Tale of Tenacity and Creativity
- Remarks by Thomas J. Curry at the ACAMS 15th Annual AML and Financial Crime Conference
- Effective Implementation of the Risk-Based Approach
- De-Risking: Fact of Fiction
- Money Services Businesses—Victims of the risk-based approach?
- The Dismantling of Operation Choke Point: Bring Back the Lost Business!
- De-Risking: What is a community banker to do?
- De-Risking: Does one bad apple spoil the bunch?
- Comptroller of the Currency Thomas Curry on the OCC’s strategies regarding reevaluating AML risk Guidance
ACAMS Advanced Certification White Papers
- AML De-Risking: An Effective Method of Plugging AML Control Failures?
- The Underbelly of AML De-Risking: Executing Case-by-Case Account Closure Decisions
- Blanket De-Risking of Money Services Businesses
- Risk-Based Approach Understanding and Implementation: Challenges Between Risk Appetite and Compliance
- Banking Non-Profit Organizations (NPOs) – How Financial Institutions can Avoid Wholesale De-Risking NPOs by Mitigating Money Laundering and Terrorist Financing Risks Posed by the Sector
ACAMS Blog Posts
- De-Risking: More than just AML
- Let’s Work Together – De-risking, de-marketing or financial exclusion: Solution elusive as long as we refuse to listen
- Will It Go Round In Circles? The debate on de-risking continues … or does it?
- De-Risking debate: new momentum towards inclusion?
- World Bank – World Bank Surveys Probe “De-Risking” Practices