Overview

Last Month (June), the organization responsible for setting international standards on anti-money laundering and countering the financing of terrorism (AML/CFT), the FATF has updated its guidance on financial inclusion to provide support in designing AML/CFT measures that meet the national goal of financial inclusion, without compromising the measures that exist for the purpose of combating crime.

There is no doubt that promotion of regulated financial systems and services is central to any effective and comprehensive AML/CFT regime. However, applying an overly cautious approach to anti-money laundering/countering the financing of terrorism (AML/CFT) safeguards can have the unintended consequence of excluding a growing number of money service businesses (MSBs), small banks, and non-profit organizations (NPOs), including many in the developing world, to access financial services.

Critics contend that supervisors and financial institutions in some developing countries, wary of crossing a regulatory redline, have erred on the side of caution by implementing laws and company policies that are more stringent than those required by the FATF. The result, they argue, is a culture of rigid, non-risk-based “overcompliance” that makes it more difficult to provide financial services to the poor.

Additionally, it is imperative to note, that the use of digital technology to promote financial inclusion has raised debates about consumer protection, data privacy, given the presence of exploitative digital technology. There are also issues about the way consumer data is used and the limit to which consumer data can be used by third-parties including the government. Even though many countries have begun to take steps to address some of these issues, there is no immediate quick-fix solution to address these issues arising from the use of digital technology to promote financial inclusion.

This particular webinar will aim at Examining the future of financial inclusion with key highlights on good practices that the FATF-updated Guidance presents in the drive to promote financial inclusion, while safeguarding financial integrity and without hindering legitimate businesses, consumers and NPOs from the regulated financial systems. Don’t miss out on engaging with Subject matter experts and a deep dive into understanding the future of financial inclusion, the attendant risk and how to mitigate them. Join and learn how Regulators and Supervisors can establish a truly risk-based approach (as per the revised FATF Recommendations 8 and 1, and UNSCR 2761) to improve the efficiency and effectiveness of AML/CFT without disrupting the operation of legitimate NGOs.

The virtual event will bring together a panel of experts including regulators, bankers and Financial Intelligence Units. The discussions shall focus on the following topics:

• From a practitioner’s perspective, what is the future of Financial Inclusion?
• Does the updated FATF-Financial Inclusion Guidance provide enough clarity on how policy makers, supervisors and regulated entities should align AML/CFT efforts with financial inclusion principles? If not, what is missing?
• What are the good and bad practices on the ground in applying the risk-based approach in AML/CFT measures (e.g. simplified measures for lower risk situations, enhanced customer due diligence in handling higher risk customers instead of de-risking, etc.)?
• How can we make sure the revision of FATF Recommendations 8 and 1, and UNSCR 2761, lead to real improvements in access to financial channels to support humanitarian aid? What additional steps are needed to achieve this?
• What good practices from government, financial sector and NPOs can better ensure access by legitimate humanitarian non-profit organisations to financial services? What can a cooperation between government bodies, financial sector and NPO sector contribute to keep humanitarian channels open? How should such a trisector approach be structured?
• How can Regulators and Supervisors establish a truly risk-based approach to improve the efficiency and effectiveness of AML/CFT; to reduce burden for low risk businesses, consumers, entities-NGO; and to focus resources on higher risk areas?