The EBA has rejected an internal report on supervision of Danskebank. The scope of the report was to assess whether there were failings in the supervision by the relevant regulators. Given that the Estonian bank was a branch as opposed to a subsidiary, primary responsibility would lie with the Danish regulator. Failure to adopt any of the recommendations is disappointing. It again highlights the need for an EU-wide anti-money laundering regulation and need to assign AML responsibility to one central regulator.
Money-laundering is a global crime requiring global solutions. Whilst considerable progress has been made under FATF to put pressure on high risk countries to close loop-holes and share relevant information, the Danskebank case shows that criminals will take advantage of poor regulatory regimes in countries that are not deemed to be high risk by FATF. New technology e.g. crypto-currencies and other block-chain based payment methods are posing new AML challenges. Senior management of financial institutions should therefore invest in new FinTech tools to allow them to stay one step ahead of financial crime. By using technology to reduce false alerts, management can focus on the transactions that are most like to result in SAR reports to the regulators.