Five Nordic banks to share KYC, aim to stop financial criminals arbitraging system

Five large financial institutions will create a single know-your-customer (KYC) utility to stop financial criminals, including launderers, arbitraging the banking system. DNB Bank, Danske Bank, Nordea Bank, Svenksa Handelsbanken and Skandinaviska Enskilda Banken are committed to a cross-border approach, starting in the Nordic region, but which could become international.

“This new utility will gather all customer data. When the customer decides what bank it wants to be with, their data can be transferred to that bank. One unified process across borders will help prevent financial crime,” a Svenska Handelsbanken spokesman said. “Criminals will not be able to play one bank off against another, exploiting minor differences in KYCE. This may not be confined in the long run to the Nordic region, although that is where we’re starting,” the spokesman said.

AML cleanup
The KYC differences might not be minor. Cleanup of anti-money laundering (AML) and anti-financial crime systems have been high on some banks’ agenda, and is not always finished business.
The Danish Financial Services Authority said last month that Danske Bank had acted too late on information about the lack of AMLmeasures and on suspicion of customers’ criminal activities in Estonia. The conduct of Danske Bank’s management had damaged its reputation, it said.

The Danish FSA made eight orders and eight reprimands, indicating the need for an increase in Dankse Bank’s capital requirement by DKK 5 billion due to increased compliance and reputational risk. Dankse Bank has until June 30 to comply with the decision.

Nordea Bank is under investigation by the Danish State prosecutor for serious economic and international crime in relation to its past role in delivering foreign exchange to foreign exchange bureau, including money laundering risk. The group said in its recent 2017
annual report it continues to invest in improving its financial crime risk management and enhanced compliance.

Svenska Handelsbank said in its 2017 annual report that over 2017, “compliance risks associated with the rules concerning measures against money laundering and terrorist financing were assessed as the most significant ones”.

Produced by Thomson Reuters Accelus Regulatory Intelligence 08-Jun-2018

Published 01-Jun-2018 by Alex Davidson, Regulatory Intelligence

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