Informal Value Transfer Systems: A Financial Institution’s Perspective

Author: Ryan Hodge, CAMS-Audit

Financial institutions today face a wide array of risks in the world of Anti-Money Laundering (AML). Key to addressing and preventing future risk is properly evaluating an institution’s Bank Secrecy Act program, whether as an external auditor, or a BSA Officer looking to conduct a self-assessment. While a high level overview can be valuable, certain issues merit a deeper look. This white paper explores how financial institutions are impacted by Informal Value Transfer Systems and how to properly examine and address the risks surrounding them.

This paper aims to provide those tasked with auditing or assessing financial institutions a new perspective of Informal Value Transfer Systems (IVTS, also known as hawala). Currently not only is information on IVTS scarce, but the major research is conducted from the viewpoint of law enforcement and government regulators.

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