Financial Crime World

Swiss Banks Adopt Technology-Driven Approach to Combat Money Laundering Amidst Stricter Regulations

Switzerland’s financial sector is responding proactively to the stricter anti-money laundering (AML) regulations, which come into effect from 2020. Here’s a look at the measures being taken by Swiss financial institutions to tackle money laundering and terrorist financing.

New Regulatory Landscape

Switzerland’s new legislative landscape includes the Swiss Anti-Money Laundering Act, revised in 2019, which mandates advisers, including multi-family offices, trustees, and lawyers, to adhere to due diligence obligations. These regulations align with the international standards set by the Financial Action Task Force (FATF).

Stricter Enforcement Approach

With stricter enforcement from Swiss Financial Market Supervisory Authority (FINMA) and other regulators, financial institutions need to be vigilant against money laundering schemes.

The Need for Comprehensive Approach

To mitigate these risks, financial institutions are:

  1. Conducting client intelligence research
  2. Undertaking enterprise-level investigations
  3. Employing technology to manage risks and foster collaboration between public and private sectors

Automation and Robotics

Swiss banks have successfully deployed automation and robotics to accomplish quick wins in AML monitoring. These tools:

  1. Prioritize AML risk alerts
  2. Enable investigators to focus on high-risk cases

Standard Protocols and Technology

Integrating standard protocols with technology:

  1. Enables focused detection on red flags
  2. Reduces overall haystack size
  3. Enhances detection system efficiencies

Cross-border Data Sharing

Though currently not used on a large scale, cross-border data sharing can lead to industry-level training sets and enhanced detection capabilities with further investment and regulatory support.

Future of Machine Learning Models

To increase trust in machine learning models, data-driven validation is crucial. This validation promotes the development and acceptance of more sophisticated surveillance systems.

Conclusion

Swiss financial institutions are gearing up to tackle money laundering and terrorist financing by strengthening their compliance programs, bolstering international collaboration, and investing in advanced analytics tools. By adopting a holistic, technology-driven approach, they can effectively protect their operations and maintain Switzerland’s reputation as a trusted financial hub.