30 Swiss Banks Failed Money Laundering Regulatory Analysis Test

The Swiss financial regulatory authorities overviewed the security of the banking sector and noticed various loopholes in the Anti-Money Laundering (AML) system of the 30 banks.

A detailed overview conducted by Switzerland’s Financial Market Supervisory Authority (FINMA) on the money laundering system of the Swiss banks during the spring disclosed that most of the banks did not comply with the basic requirements of AML measures. FINMA said this analysis was conducted after they monitored repeated loopholes and shortcomings in banks’ money laundering risk analysis. The report’s conclusion was only disclosed after repeated visits to the banks under investigation.

The inefficient anti-money laundering system of the banks is a significant issue for Switzerland as it currently ranks at the top in banking security, and non-compliance with AML regulations damages its reputation. According to Boston Consulting Group’s Global Wealth Report 2023, published in late June, Hong Kong will overshadow Switzerland as the worldwide center for wealth by 2025.

FINMA stated in the report, “in doing so, it was found that a large number of the risk analyzes examined did not meet the basic requirements for such an analysis.”  Authorities cleared that, in some cases, banks did not have adequate due diligence and risk analysis systems for money laundering. The review also disclosed that some banks did not have essential measures to reap accurate results for some countries, high-risk industries, and “politically exposed persons”.

To overcome these loopholes in financial institutes, FINMA released guidelines for the banking sector to combat money laundering. FINMA explained, “the money laundering risk analysis is an important tool for the strategic management of banks and other financial intermediaries. Banks can use this to identify and mitigate the risks in the area of money laundering and determine the relevant risk criteria for the financial institution’s activities.” According to FINMA, Swiss banks are required to execute a money laundering risk assessment in accordance with the Swiss Anti-Money Laundering Ordinance, which takes into account both the nature of their existing business relationships and the business they are going to deal with.

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