Financial Crime World

Svalbard and Jan Mayen Islands Face Growing Threat of Financial Crime

Regulators Sound the Alarm on Ongoing Risks

OSLO, NORWAY - As the Svalbard and Jan Mayen Islands continue to attract international attention for their natural beauty and economic potential, regulators are sounding the alarm on the growing threat of financial crime in the region.

Evolving Risks and Technological Developments

According to a recent report by KPMG, fraud and financial crime are ongoing risks that financial service providers consistently work to mitigate. The report highlights evolving technological developments, geopolitical events, and interconnected financial networks as factors increasing these risks.

Key Areas of Concern

  • Terrorist financing
  • Beneficial ownership
  • Sanctions/tax evasion
  • Consumer scams
  • Potential compliance violations

Strengthened AML/CFT Frameworks Needed

The KPMG report emphasizes the need for strengthened AML/CFT frameworks and risk mitigants to prevent money laundering and terrorist financing. Regulators are urging financial institutions to implement robust anti-money laundering controls, including:

  • Customer due diligence
  • Suspicious activity reporting

Digital Assets: New Vulnerabilities for Criminals

The report warns of the growing threat posed by digital assets, such as cryptocurrencies and non-fungible tokens (NFTs), which have created new vulnerabilities for criminals to exploit. Regulators are calling for increased attention to AML/CFT regulations in these areas, particularly with regard to NFTs and decentralized finance (DeFi) platforms.

Consumer Protection: A Top Priority

The report also emphasizes the importance of consumer protection, urging regulators to remain focused on potential violations of consumer compliance regulations, fair processing and treatment of consumer complaints, claims, and disputes, and clarity of consumer communication throughout the process.

Actionable Steps for Financial Institutions

  • Add analytics and automation to client onboarding
  • Eliminate antiquated technology
  • Establish a mature conduct risk program
  • Strengthen controls in regulatory focal areas

Staying Ahead of Emerging Threats

As the Svalbard and Jan Mayen Islands continue to develop their financial sectors, it is clear that combating financial crime will be a top priority for regulators. By staying ahead of emerging threats and implementing effective risk management strategies, financial institutions can protect their customers and maintain public trust.

Quote from Fiachre O’Neill, Chief Risk & Compliance Officer at PayPal

“Financial crime is a growing threat in Svalbard and Jan Mayen, and it’s essential that financial institutions take proactive steps to mitigate these risks. By leveraging technology and data, we can monitor activity and identify trends to keep our customers safe.”