Financial Crime World

Financial Inclusion Elusive as Crime Continues to Thrive in Denmark

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A recent report from FCG has issued a stark reality check on the state of anti-money laundering (AML) efforts in Denmark, painting a grim picture of ongoing challenges and lack of progress.

Gaps in AML Efforts

Despite AML being “top of mind” for top management, the report reveals fundamental gaps that need to be closed. Measuring efficiency in transaction monitoring and setting key performance indicators (KPIs) for overall AML work are identified as major hurdles. This is corroborated by data from the Danish Financial Supervisory Authority (FSA), which shows that:

  • Transaction monitoring remains a daunting task for financial institutions
  • Risk assessment continues to be a challenge
  • Ongoing due diligence is often neglected

Over-Investment in AML Measures

A concerning trend has emerged, with financial institutions over-investing in AML measures out of fear of penalties, yet without evidence to support their effectiveness. This results in a significant allocation of resources without corresponding gains in combating financial crime.

Quote from Anonymous Respondent

“Even if huge sums of money have been invested, there is no evidence that we have made any progress in combatting financial crime.”

The Road Ahead

The report’s findings suggest that Denmark still has a long way to go in achieving financial inclusion while keeping crime at bay. As the country continues to grapple with these issues, it remains unclear whether the efforts being made will yield meaningful results or if more drastic measures are needed to address the persistent problem of financial crime.

Recommendations

  • Financial institutions must prioritize effective AML measures and demonstrate evidence-based progress
  • Regulatory bodies should provide guidance on measuring efficiency in transaction monitoring and setting KPIs for overall AML work
  • Further research is needed to understand the root causes of financial crime and develop targeted solutions