Financial services with a high level of transactions are still having trouble stopping money laundering and terrorism financing.
That’s according to the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA).
Together, these supervisory authorities have published their second joint opinion on the risks of money laundering and terrorism financing affecting the EU’s financial sector.
Having drawn on information from national authorities, the authorities found that the monitoring of transactions and suspicious transactions reporting still raise concerns, particularly in sectors where a financial institution’s business model is based on frequent transactions.
The regulators were particularly worried about the weaknesses in the controls that financial institutions have put in place, especially in high-transaction industries.
Additionally EBA, EIOPA and ESMA noted that the sector have more to do to meet the challenge of developing adequate business-wide and customer risk assessments.
While acknowledging that new innovations like the ones done in the RegTech segment of the FinTech sector could empower institutions to better fight financial crime, the authorities warned that technology could also create more risks.
For instance, they stated that the spread of virtual currencies was an area of growing concern for the them as cryptocurrencies have given rise to more abilities for nefarious uses, like terrorism funding and money laundering.
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