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Taking AML Maturity in Bangladesh to the Next Level

Mr. Abu Hena Mohd. Razee Hassan, Head, Bangladesh Financial Intelligence Unit, delivering the keynote at the Fintelekt AML 3rd Annual Summit 2019 in Dhaka.

The AML community in Bangladesh is stepping up its fight against money laundering by coming together to improve the current status of AML controls, putting preventive measures in place and increasing regulation and awareness around Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT).

Bangladesh has made significant progress since the Mutual Evaluation Report in 2009, reflecting political commitment and leadership towards AML and CFT. In 2018, a follow-up Mutual Evaluation Report was undertaken, in which Bangladesh was deemed Compliant for 6 and Largely Compliant for 23 of the FATF 40 Recommendations.

At the recently held Fintelekt Anti-Money Laundering 3rd Annual Summit in Dhaka, Mr. Abu Hena Mohd. Razee Hassan, Head, Bangladesh Financial Intelligence Unit, highlighted the current challenges and road ahead for the banking and financial services industry in Bangladesh. According to Mr. Razee Hassan, some of the biggest challenges faced by Bangladesh include

At the recently held Fintelekt Anti-Money Laundering 3rd Annual Summit in Dhaka, Mr. Abu Hena Mohd. Razee Hassan, Head, Bangladesh Financial Intelligence Unit, highlighted the current challenges and road ahead for the banking and financial services industry in Bangladesh

Trade Based Money Laundering (TBML), illegal channels of mobile banking, cybersecurity, de-risking by foreign banks/termination of correspondent banking relationships and weak KYC procedures.

He went on to recommend that for effective implementation of the AML Regime, Know Your Customer (KYC) and Customer Due Diligence (CDD) norms must be given their due weightage. All banks must have a policy for Prevention of Money Laundering and Financing of Terrorism, approved by the Board of Directors (BOD); senior management, with the BOD having the highest level of commitment towards fighting money laundering and terrorist financing. He stressed that banks, financial institutions and regulators need to work together to take AML/CFT in the country to the next level.

Also speaking at the summit, Mr. Swapan Kumar Biswas, CAMLCO, Mutual Trust Bank and General Secretary – Association of Anti-Money Laundering Compliance Officers of Banks in Bangladesh (AACOBB) shared various initiatives being taken by the AACOBB to improve the current status of AML/CFT Regime in Bangladesh. According to Swapan, financial institutions in Bangladesh need to put regulations in place to comply with local regulators as well as to match international standards. To make KYC and CDD procedures efficient, centralised account opening processes need to be mandated and communication between financial institutions and BFIU needs to be strong.

Create a culture of compliance, where being compliant is a habit and part of everyday life. Once achieved, there will be no need to balance business and compliance. “
Swapan Kumar Biswas, CAMLCO, Mutual Trust Bank and General Secretary- Association of Anti-Money Laundering Compliance Officers of Banks in Bangladesh (AACOBB)

A panel comprising AML compliance heads from public sector, foreign and private banks in the country discussed current AML challenges faced by the banks in Bangladesh at the Summit.

According to the panel, challenges faced by banks and financial institutions in Bangladesh include:

i) AML compliance not being treated as a core banking function, and seen as a cost centre;

ii) Requisite skill sets being in short supply ;

iii) Tone from the top has not changed significantly;

iv) 70%-80% of money laundering is taking place through Trade Based Money Laundering, which is extremely difficult to identify; and

v) Banks and financial institutions are plagued by poor KYC data.

Financial institutions in Bangladesh can improve their risk assessment practices by reviewing risks before launching all products, strengthening their regulatory guideline framework, giving weightage to the sectors customers are working in along with individual weightage and by following up with agents/colleagues who bring in business while assigning risk scores.

A strong need has also been felt to improve technology in the country’s banking and financial industry. Artificial Intelligence (AI) and data mining need to be introduced within organizations. Once a balance between AI and data mining is achieved, human intervention can be reduced by a huge extent.

Organizations need to strengthen ongoing due diligence. Whenever a customer visits a branch with any request, bank staff should take advantage and to do a re-KYC. Organizations can think of introducing Uniform Customer Identification Code (UCIC). Risk Based Approach needs to be integrated with technology and software should be continuously updated based on real life cases. Screening lists should be regularly updated in the system.

With discussions taking place among a variety of stakeholders – the BFIU, banks, financial institutions, insurance companies, technology suppliers and consulting companies, Fintelekt’s AML 3rd Annual Summit provided an opportunity for much debate as well as actionable takeaways for banks and financial institutions to act on, towards a stronger AML/CFT regime in the country.