At this year’s AMLP Forum in London, one session that drew a lot of attention was the "Regulatory & Policy Roundtable," where current activities and strategic priorities in AML supervision were discussed. The panel included Andrea Bowe, Director at the UK Financial Conduct Authority (FCA); Erik Blommé, Head of AML Supervision at Finansinspektionen Sweden; Stewart McGlynn, Head of AML and Financial Crime Risk at the Hong Kong Monetary Authority; and Willem Schudel, Head of Financial Crime Supervision at De Nederlandsche Bank. I had the opportunity to moderate this session, and the interaction and insights shared were both practical and thought-provoking.
The roundtable featured in-depth discussions from several jurisdictions, with insights that pointed to practical, real-world supervisory challenges and strategies.
The UK FCA focus on outcomes
Andrea Bowe shared the FCA’s work on achieving a risk-based, outcomes-focused supervisory approach, that encourages firms to identify, assess and mitigate their true financial crime risks. By aligning with shared national priorities, the UK is for example working toward an integrated model that combines fraud prevention and AML, aimed at delivering more impactful results.
Sweden's regulator prioritises data and information-sharing
Erik Blommé discussed Sweden’s efforts in incorporating new data sources, including IMF and Swift’s aggregated cross-border payments data, into AML supervision. Through local legislation, Sweden has also enabled information-sharing partnerships that are proving useful in supporting effective AML supervision.
The Dutch regulator wants to see focus on high-level activities
Willem Schudel brought up the Dutch focus on putting resources toward high-value activities and, importantly, stepping back from activities that add limited value - all things that require a detailed, relevant understanding of a firm's risk exposure. There is a clear need for better alignment between policymakers, industry, and supervision in addressing the link between financial exclusion and preventive measures.
The Hong Kong authority highlights the need for dynamic business-wide risk assessments and intelligence
Stewart McGlynn shared Hong Kong Monetary Authority’s shift towards effectiveness and outcome-based supervision, with a focus on using data and Suptech (Supervisory Technology). Initiatives like the "Macro Analytics" pilot are homing in on fraud-related mule accounts and building up private-sector controls. The HKMA emphasized the role of Regtech adoption as a key component of effective AML supervision. The most common failings amongst regulated entities was poor business-wide risk assessments, resulting in frameworks that were not intelligence-led.
"We just want to be compliant" is not longer an option - The regulators want to see actions that mitigate true risks, not tick-box exercises
We also had a nuanced discussion on balancing technical compliance with mitigation of true financial crime threats and risks. Utilizing intelligence to allow for an intelligence-led approach was discussed and panellists noted the importance of collaboration between public and private sectors, especially in the use of new technologies for financial crime risk identification, mitigation, and prevention.
This roundtable was a great opportunity to explore the evolving regulatory landscape, where advanced technology, collaboration and staying on top of existing and emerging threats and risks are key to a more effective AML supervision.
Martin Nordh
CEO & Founder, Acuminor