Financial Crime World

Financial Crime Trends in Greenland to Watch Out for in 2023

Regulatory bodies in Greenland are preparing to tackle the evolving landscape of financial crime, and the country’s financial institutions must be prepared to address these emerging threats. According to KPMG’s report “Ten Key Regulatory Challenges of 2023,” there are several areas that will require increased attention.

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT)

As Greenland’s economy grows, so does the risk of illicit financial flows. Regulators will be scrutinizing financial institutions’ AML/CFT frameworks and risk mitigants to ensure they are effective in preventing:

  • Terrorist financing: Financial institutions must be able to identify and prevent transactions that may be used to finance terrorist activities.
  • Beneficial ownership exploitation: Financial institutions must be able to identify the true owners of customers and prevent them from using their accounts for illicit activities.

Cybercrime

As more businesses move online, the risk of data breaches and cyber-attacks grows. Regulators will be expecting financial institutions to have robust cybersecurity risk management in place to protect against these threats.

  • Data breaches: Financial institutions must be able to detect and respond quickly to data breaches to prevent unauthorized access to customer information.
  • Cyber-attacks: Financial institutions must be able to defend themselves against cyber-attacks, including phishing attacks, ransomware attacks, and other types of malware.

NFTs and DeFi

As these technologies grow in popularity, there is a heightened risk of money laundering and terrorist financing. Regulators will be expanding existing AML regulations to include assessments of customer due diligence and suspicious activity reporting related to NFTs and DeFi platforms.

  • Customer due diligence: Financial institutions must be able to identify the true owners of customers and understand their financial activities.
  • Suspicious activity reporting: Financial institutions must be able to detect and report suspicious transactions that may be related to money laundering or terrorist financing.

Sanctions and Price Cap Compliance

As geopolitical tensions rise, the country’s financial institutions must be prepared to navigate complex sanctions regimes and ensure that they are not inadvertently facilitating illicit activities.

  • Sanctions compliance: Financial institutions must be able to identify and comply with sanctions regulations to prevent transactions that may be prohibited.
  • Price cap compliance: Financial institutions must be able to understand and comply with price caps to prevent transactions that may be related to illicit activities.

Additional Key Regulatory Challenges

In addition to these areas of focus, the report highlights several other key regulatory challenges that financial institutions in Greenland should be aware of:

  • Insider corruption: Regulators will be looking for signs of employee misconduct or vendor/third-party misconduct that could compromise the integrity of financial institutions.
  • Beneficial ownership information reporting and analysis: Financial institutions must ensure that they are collecting and analyzing beneficial ownership information to prevent illicit activities.
  • P2P responsibilities, fraud, and losses: Regulators will be scrutinizing financial institutions’ risk programs and controls to prevent peer-to-peer (P2P) transactions from being used for fraudulent purposes.

Best Practices

To stay ahead of these regulatory challenges, financial institutions in Greenland should consider implementing the following best practices:

  • Add analytics and automation to client onboarding processes: Financial institutions can use technology to streamline their client onboarding processes and reduce the risk of illicit activities.
  • Eliminate antiquated technology that may be vulnerable to cyber-attacks: Financial institutions must ensure that they are using secure and up-to-date technology to protect against cyber-attacks.
  • Establish a mature conduct risk program to identify and mitigate potential risks: Financial institutions can use their conduct risk programs to identify and mitigate potential risks, including insider corruption and beneficial ownership exploitation.
  • Strengthen controls in regulatory focal areas (FinCEN priorities): Financial institutions must ensure that they are complying with all relevant regulations and laws, including those related to AML/CFT, cybercrime, and sanctions compliance.