Question 1

What are the core AML obligations of a bank?

Accepted Answer

Universally: appointment of an MLRO / BSA officer (or equivalent), board-approved AML / CTF programme, customer identification and verification at onboarding, enhanced due diligence for high-risk customers and PEPs, beneficial-ownership identification, sanctions screening of customers and transac...

Question 2

What is correspondent banking due diligence?

Accepted Answer

Special EDD applied by a bank ("correspondent") providing services to another bank ("respondent") in another jurisdiction. The Wolfsberg Principles for Correspondent Banking, FATF Rec. 13 and US BSA require collecting information on the respondent's ownership, AML controls, regulatory status, cus...

Question 3

What is "de-risking" and why is it controversial?

Accepted Answer

The wholesale exit from entire customer segments (e.g. money-services businesses, NGOs, correspondent relationships in the Pacific) rather than managing the risk on a customer-by-customer basis. FATF, the World Bank and FSB have repeatedly criticised de-risking as inconsistent with the risk-based...

Question 4

What is real-time payments screening?

Accepted Answer

Sanctions and fraud screening conducted within the second-or-sub-second window of an instant payment scheme (Australia's NPP, EU's SCT Inst, UK's Faster Payments / future RT-RP, US's FedNow and RTP). Requires pre-computed customer profiles, optimised matching, and effective fuzzy-match thresholds...

Banking & payments