Financial Crime World

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Northern Mariana Islands Tackles Banking Regulations to Prevent Financial Crime

The Northern Mariana Islands (NMI) is taking proactive measures to prevent financial crime and fraud in its banking sector. Regulators are focusing on evolving technological developments, geopolitical events, and interconnected financial networks that may increase the risk of fraudulent activities.

Regulatory Focus

Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) frameworks and risk mitigants will be a key area of focus to prevent illicit exploitation of access to the U.S. financial system. Regulators are also paying close attention to fraud models, operations, and investigation processes, as well as insider corruption and cybercrime.

New Areas of Regulation

The NMI is expanding its regulations to include crypto and digital assets, with a focus on combating threats and vulnerabilities posed by these emerging technologies. Regulators will also be increasing their attention to Anti-Money Laundering (AML) for Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi) platforms.

Interplay with Consumer Protection

While regulators are focused on preventing financial crime, they are also ensuring that companies comply with consumer protection regulations. This includes:

  • Assessing companies’ use of account holds and freezes
  • Model development and validation
  • Payment sender/receiver authentication procedures
  • Oversight of synthetic identity fraud

Evolving Risks

Regulators in the NMI are facing the challenge of mitigating complex and evolving risks that may threaten national security. These include:

  • Domestic and international terrorist financing
  • Increased focus on sanctions
  • Transnational criminal organizations
  • Drug and human trafficking, smuggling, and proliferation financing

Best Practices for Fintech and Payments Companies

To combat financial crime, fintech and payments companies in the NMI should consider:

  • Adding analytics and automation to client onboarding
  • Eliminating antiquated technology
  • Establishing a mature conduct risk program
  • Strengthening controls in regulatory focal areas

Expert Insights

KPMG Regulatory Insights has released a report highlighting the top 10 regulatory challenges of 2023. The report provides insights from industry experts and actionable steps for companies to mitigate risk.

Stay Ahead of Regulatory Changes

To stay informed about regulatory developments in the NMI, sign up to receive KPMG Regulatory Insights thought leadership content. You can also follow KPMG Regulatory Insights on social media for the latest updates on evolving supervisory, regulatory, and enforcement trends.