Switzerland Tackles Financial Crimes in Emerging Markets
As the global economy evolves, Switzerland has taken a proactive approach to combating financial crimes in emerging markets. The country’s robust regulatory framework has been instrumental in preventing money laundering and terrorist financing.
New Obligations for Financial Institutions
In 2020, the Swiss Anti-Money Laundering Act will come into force, introducing new obligations for financial institutions. These include:
- Extending due diligence requirements to “advisers” such as multi-family offices, trustees, and lawyers
- Requiring periodic checking and updating of client data
- Reporting suspicious activity to the Money Laundering Reporting Office Switzerland (MROS)
- Registration of associations that collect or distribute assets abroad
Institutions Must Reassess Financial Crime Strategies
Institutions must now reassess their financial crime strategies and detection systems, incorporating anti-financial crime measures into daily operations. This proactive approach is crucial in preventing unintended involvement in laundering schemes.
International Collaboration
Swiss regulators have taken a leading role in international collaboration with other agencies, enhancing their effectiveness in tackling financial crimes. A holistic approach to combating money laundering involves:
- Conducting client intelligence
- Undertaking enterprise-level investigations
- Deploying technology to identify and combat illicit finance
Public-Private Partnerships Crucial
Public-private partnerships between law enforcement agencies and financial institutions are also crucial in sharing information and best practices. The implementation of an effective compliance program is essential for ensuring the integrity of the financial system.
Technology Plays a Key Role
In recent years, global banks in Switzerland have been leveraging technology to detect and prevent money laundering risks in a holistic manner. Instead of focusing on individual transactions or customers, they are using data analytics to connect large volumes of existing data across domains, providing compliance teams with more targeted information.
Automation and Robotics
Automation and robotics can also be used to prioritize AML risk alerts, allowing investigators to focus on high-risk cases rather than false positives. Organizations should embed technology in their protocols to reduce the haystack and increase detection efficiencies.
Applications Like PET
Applications like Privacy Enabled Technology (PET) enable cross-border data sharing without breaching client privacy, creating industry-level training sets for unusual behaviors. However, further investment and regulatory support are needed to deploy this technology on a larger scale.
Deploying Data-Driven Validation
Deploying more data-driven validation of machine learning models will also increase trust in the use of algorithms and facilitate the development of advanced surveillance systems.
Conclusion
As Switzerland continues to tackle financial crimes in emerging markets, it is clear that technology will play a vital role in preventing money laundering and terrorist financing. By leveraging technology and international collaboration, Switzerland is demonstrating its commitment to maintaining a robust regulatory framework and protecting the integrity of the global financial system.