EU Advances in Using Technology to Combat Money Laundering and Terrorism Financing
Super Technology Affirmed as Crucial Anti-Money Laundering and Countering Financing of Terrorism Instrument by EBA
The European Banking Authority (EBA) has conducted an investigation into the use of technology tools ('SupTech') in facilitating anti-money laundering (AML) and countering the financing of terrorism (CFT). The study, which is available here, is part of the new EU AML/CFT framework, which includes the establishment of the Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA).
Technological Advancements
The use of SupTech tools in the EU is rapidly evolving, with technologies like artificial intelligence, natural language processing, blockchain analytics, and advanced data visualization being employed to enhance AML/CFT supervision. These tools are used for tasks such as large-scale risk assessments, monitoring complex transaction flows, and automating manual processes.
Institutional Developments
The establishment of the AMLA is central to coordinating national authorities and promoting consistent EU rules application. The EBA plays a crucial role in supporting the adoption of SupTech by competent authorities across the EU.
Challenges in the Use of SupTech Tools
Despite the potential benefits, the full potential of SupTech adoption is hindered by operational and legal challenges. Limited resources and legal uncertainties, as well as data governance constraints, pose significant challenges. The need for extensive testing and calibration to avoid false positives is a major hurdle.
Adoption Stages
SupTech deployments are still in early stages, with 47% of tools in production, 38% in development, and 15% in exploratory phases. Most initiatives were launched within the past three years.
Good Practices in the Use of SupTech Tools
SupTech tools improve data quality and operational efficiency by automating repetitive tasks and optimizing resources. They provide accurate and timely insights into emerging risks and trends. SupTech also facilitates better collaboration across jurisdictions by standardizing data collection and improving data sharing.
The EBA’s initiatives, such as workshops and surveys, help identify best practices and support innovation in AML/CFT supervision. The report outlines examples of effective practices in areas such as change management, data and technology, supervisory and regulatory strategies.
Overall, while SupTech offers significant potential for enhancing AML/CFT supervision in the EU, addressing the existing challenges and fostering further innovation are crucial for its successful integration. The EBA intends to continue supporting NCAs and the AMLA in strengthening their use of technology and fostering innovation in AML/CFT supervision across the EU.
Read also:
- U Power's strategic collaborator UNEX EV has inked a Letter of Intent with Didi Mobility to deploy UOTTA(TM) battery-swapping electric vehicles in Mexico.
- Global Gaming Company, LINEUP Games, Moves Into Extensive Global Web3 Multi-Platform Gaming Network
- Gold nanorod market to reach a value of USD 573.3 million by 2034, expanding at a compound annual growth rate (CAGR) of 11.7%
- Approaching Manufacturing: 2027 Karma Amaris GT Coupé
