Another warm
weekend in Singapore and time to catch up on reading. Reading this article (http://www.economist.com/news/special-report/21601624-and-no-end-new-ways-pay-your-bills-end-monopoly
) on the growing percentage of payments done via mobile networks, flashcards,
internet payment gateways, I think about the impact on the world of AML/CFT.
Yes: banks
are losing their monopoly on the execution of payments, although I don’t
believe that banks will ever be completely out of the picture. The payments
infrastructure that banks have built is not something that can easily be
replaced. And interbank and cross border infrastructure (SWIFT, SEPA, domestic
clearing networks etc.) only add to that.
No doubt
the alternatives to traditional modes of payment will increase and likely banks
will play a smaller (relative) role in the overall payments world.
So what
does that mean for AML/CFT? Assuming the AML/CFT risks are identical in these
new forms of payment compared to payments via the regular payment channels, the
danger sits more in (a lack of detection) than in anything else.
Banks have
– voluntarily but more often forced by regulators - invested heavily in
monitoring and screening solutions. If the payments landscape changes
drastically and players that are potentially not even under supervision from
the banking regulators execute an ever increasing portion of payments, what
does that mean for the risk profile of a country or industry segment?
An
interesting problem without immediate answers. Views are welcome…
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