Title: German Banks Brace for Tightened Money Laundering Regulations: Challenges and Solutions

New Money Laundering Prevention Regulations in Germany

In January 2020, Germany’s banking sector began preparing for the implementation of new money laundering prevention regulations, in line with the European Union’s 5th Anti-Money Laundering Directive (5AMLD). The German Money Laundering Act (GwG) was amended to include stricter measures for financial institutions.

Mounting Challenges

The following changes bring significant challenges for German financial institutions:

New Requirements under the Amended GwG

• Beneficial Owner Information: Banks must now obtain and verify beneficial owner information from the transparency register and submit discrepancy reports for any deviations.
• Enhanced Due Diligence: The scope of enhanced due diligence procedures for high-risk countries and regions has been expanded.

Increased Workload

• High-Risk Client Relationships: Heightened responsibilities for enhanced due diligence on high-risk client relationships.
• IT Monitoring Alerts: An escalation in alerts necessitating swift and proper response.

Top-notch KYC Processes and Data

• Compliance with FATF Assessment: Focus on robust KYC processes and supporting data with digitalization.
• Digitized Banking Products: Properly addressing risks related to digitalized banking products, such as cryptocurrencies.

BDO: Your Partner in Meeting These Challenges

With a wealth of experience from audits and advisory projects related to money laundering prevention for credit and financial services institutions, BDO offers the following essential services:

1. Implementing Fresh GwG Requirements
2. Assessment and Optimization of KYC Procedures
3. Review and Rectification of KYC Data and Documents
4. Money Laundering Risk Analysis
5. Support in Handling of Enhanced Due Diligence Activities
6. Execution of Control and Review Activities
7. Training of Money Laundering Reporting Officers and Staff
8. Study of the Potential for Digitalization of Processes

Contact us here to learn about our comprehensive project experiences, detailed information on our services, and explore how we can tailor our expertise to best support your institution.

Request for Proposal

Should you require further information or wish to discuss how we can provide you with the best possible assistance in implementing these changes and ensuring your financial institution remains compliant with the new regulations, please don’t hesitate to contact us.