Thailand Cracks Down on Financial Crime with Strict Banking Regulations

Enforcing Compliance to Prevent Illicit Activities

Bangkok, Thailand - In a bid to tackle financial crime and ensure the integrity of its banking system, Thai authorities are set to enforce severe compliance regulations for customers seeking to open new bank accounts in the country. This move comes as part of an ongoing effort to crack down on illicit activities, with local authorities having already closed over 300,000 “mule” accounts since November last year.

The Scale of the Problem

According to estimates from the anti-online scam center AOC 1441, in collaboration with the Bank of Thailand, the Anti-Money Laundering Office (AMLO), and the Securities and Exchange Commission, the number of accounts used for fraudulent methods could have reached as high as one million.

New Regulations: Customer Due Diligence

Under the new regulations, set to be implemented by June 1, all banks will be required to rigorously apply the Customer Due Diligence (CDD) approach when opening new accounts. The CDD approach involves verifying the identity and legitimacy of customers, ensuring that they are not involved in illicit activities.

Growth of the Digital Banking Sector

The compliance industry in Thailand’s digital banking sector has grown rapidly over the past few years, driven by government initiatives and a commitment from financial institutions to respond to emerging risks. According to forecasts, the country’s digital banks market is expected to grow by 8.69% from 2024 to 2028, with an accompanying increase in compliance-related activities.

A Secure and Sustainable Future for Digital Banking

The Thai banking industry has undergone significant changes in recent years, with a shift towards digital banking necessitating a robust compliance framework to ensure the integrity and stability of financial transactions. As the industry continues to evolve, compliance will remain a cornerstone, ensuring that the digital transformation of banking is secure, sustainable, and aligned with international best practices.

Impact on Financial Crime

For Thai authorities, the enforcement of these new regulations marks an important step in preventing financial crime and protecting the country’s financial ecosystem. With over 300,000 “mule” accounts already closed since November last year, the move is expected to have a significant impact on the fight against illicit activities.