Open Banking Impacts for AML/CTF Regulatory Compliance

Should AML and Risk professionals consider open banking a threat or a useful ally in the war against financial crime?

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White Paper

Open banking is gaining momentum worldwide. Though it is not a new concept, the rapid growth of fintech adoption, coupled with advances in APIs and other technology is generating greater interest in open banking across financial institutions, regulators, fintechs, customers and financial criminals. For financial institutions anti-money laundering (AML) and know your customer (KYC) compliance executives and officers, open banking presents a challenging, fragmented, and still-evolving global regulatory landscape. Understand the key strategies financial institutions need to follow including:

  • Establish thorough compliance and vetting requirements and processes for onboarding TPPs before they are permitted to integrate with the FI's APIs.
  • Encourage leadership to invest in effective technical tools that enable AML transaction monitoring, sanctions screening and real time KYC exchanges across the TPP ecosystem
  • Define clear internal standards for creating audit trails and reporting procedures that consider not only the FI's activities, but that of their TPP partners as well. 
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