Denmark’s Financial Institutions Struggle with AML Challenges, Report Reveals

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A new report by FCG sheds light on the ongoing struggles faced by Denmark’s big financial institutions in combating financial crime through anti-money laundering (AML) measures. The study, titled “AML State of Play,” is based on anonymous interviews with senior executives at ten major Danish banks and reveals a critical view of the current AML landscape.

Fundamental Gaps Remain Unaddressed

Despite being top of mind for senior management, AML remains plagued by fundamental gaps that need to be addressed, according to report author Kenneth Ullman Eenholt. “If people think that AML has peaked, they are wrong,” he stressed.

Challenges Identified in the Report

• Measuring efficiency in transaction monitoring
• Setting key performance indicators for overall AML work

These challenges align with data from the Danish Financial Supervisory Authority (FSA), which reported in 2018-2020 that transaction monitoring, risk assessment, and ongoing due diligence remained challenging areas for Danish banks.

Institutions Investing Heavily in AML Measures

Institutions are investing heavily in AML measures out of fear of penalties, but there is little evidence to suggest these efforts are effective. “Even if huge sums of money have been invested, there is no evidence that we have made any progress in combatting financial crime,” an anonymous respondent lamented.

The Need for More Effective Strategies

• Rather than simply investing in measures without tangible results
• AML strategies need to be more efficient and effective

As Denmark’s financial institutions continue to grapple with these challenges, it remains to be seen whether they will be able to make meaningful strides against financial crime.