Financial Crime Prevention Strategies Gain Momentum in Switzerland

Strengthening Regulations to Combat Money Laundering and Terrorist Financing

Switzerland has been strengthening its regulations to prevent money laundering and terrorist financing, aligning with international standards set by the Financial Action Task Force (FATF). The revised Swiss Anti-Money Laundering Act, effective from 2020, imposes new obligations on financial institutions, including multi-family offices, trustees, and lawyers. This requires a re-evaluation of existing financial crime strategies and detection systems, as well as the integration of anti-financial crime measures into daily operations.

Proactive Approach to Enforcement

In an increasingly complex global landscape, Swiss regulators are taking a proactive approach to enforcement both domestically and internationally. The growing collaboration between regulators and agencies has enhanced their effectiveness, prompting global financial institutions to adopt holistic approaches in managing financial crime risks.

Essential Measures for Effective Anti-Money Laundering Activities

Conducting client intelligence and undertaking enterprise-level investigations into suspicious activity
Consistent application of FATF standards
Public-private partnerships with law enforcement agencies
Improved cross-border and domestic information sharing
Enhanced data quality and standardization
Use of technology to identify and combat illicit finance

Implementation of a Comprehensive Compliance Program

Implementing a comprehensive compliance program is crucial for financial institutions in Switzerland. This includes:

Ensuring all employees understand their roles and responsibilities in preventing financial crime
Providing adequate training and resources

Technology-Driven Approaches to Detect and Prevent Risks

Swiss banks have been at the forefront of utilizing technology to detect, manage, and prevent risks from money laundering. Rather than relying on individual transactions or customers, they are leveraging advanced analytics to connect large volumes of existing data across domains, providing compliance teams with more complete and targeted information.

Automation and Robotics for Enhanced Efficiency

We have achieved significant “quick wins” for our clients by applying automation and robotics to prioritize anti-money laundering risk alerts, enabling investigators to focus on high-risk cases rather than false positives. Organizations should embed technology in their protocols to standardize what is considered normal behavior, allowing them to focus on red flag activity.

The use of PET enables the sharing of cross-border data without breaching client privacy, which can lead to the creation of industry-level training sets for unusual behaviors and improve detection rates. However, further investment and regulatory support are necessary to scale up cross-border data sharing and detect elaborate money laundering networks.

Validating Machine Learning Models

Organizations should seek to deploy more data-driven validation of machine learning models, which will increase trust in the use of algorithms and facilitate the development and acceptance of advanced surveillance systems.

Conclusion

By adopting these strategies, financial institutions in Switzerland can stay ahead of the curve in preventing financial crime and maintaining a strong reputation in the global financial landscape.