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Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

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Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

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Featured Pathways

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Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

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Book a demo

Pricing

Ready to get started?

Plans & Membership

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

Book a demo

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Money Laundering Key Risk Indicators

Money Laundering Key Risk Indicators

Iain Hoggarth

15 years: Risk & compliance

Regulated institutions have a broad responsibility to comply with all applicable anti-money laundering (AML) and anti terrorist financing legislation. In this video, Iain discusses the areas AML regulation addresses in order to identify criminal activity.

Regulated institutions have a broad responsibility to comply with all applicable anti-money laundering (AML) and anti terrorist financing legislation. In this video, Iain discusses the areas AML regulation addresses in order to identify criminal activity.

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Money Laundering Key Risk Indicators

13 mins 52 secs

Key learning objectives:

  • Explain why banks are fined

  • Describe the key identity and qualitative checks

  • Identify all the risk indicators, and the crucial things regulators look for in each of them

Overview:

In order to accurately evaluate the size of risk a bank faces, or wishes to undertake, they use risk indicators such as: sources of wealth and legal entity type to identify suspicious or illegal activity. From this, regulators can develop a risk-based approach to handling the case.

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Summary

Why are banks fined?

  1. Insufficient policy frameworks
  2. Poor procedural execution
  3. Inadequate training for colleagues
  4. Insufficient screening processes
  5. Poor record keeping
  6. System inadequacy
  7. Human error
  8. Corruption

What key identity and qualitative checks are completed?

Individual identity checks – This includes the following:

  1. National identity card
  2. Passport
  3. Driving license
  4. Birth certificate

Corporate identity checks – This includes the following:

  1. Trading licenses
  2. Articles of association
  3. Incorporation documentation
  4. Tax documentation

Qualitative checks:

A business may be viewed as high risk at the very beginning. Hence, banks have a responsibility to regularly update customer records on matters that are considered risky. This ensures compliance matters are up to date to avoid any negative consequences.

What are the risk indicators?

Legal Entity Type - refers to the legal status of the entity being banked. High risk and unusual structures are likely to be analysed. These include:

  • Trusts
  • Foundations
  • Custody entities
  • Shell companies
  • Captive companies

Industry and Employment – This is an analysis of the nature of the customer, their employment or their industry. Sensitive trades are flagged as the following:

  • Precious metals or stones
  • Cash or financing operations
  • Pawn shops
  • Weaponry or dangerous materials
  • Charities
  • NGOs
  • Government agencies
  • Businesses receiving money via donations or other unclear means
  • Casinos and gambling

High Risk Products – Some banking products are considered higher risk and thus require enhanced checks. These include:

  • Cash products
  • Foreign exchange
  • Tailored telegraphic transfer software
  • Encashment facilities
  • Trade finance products

Country Risk – This usually includes an initial assessment of:

  1. Country of origin
  2. Residence
  3. Operation
  4. Incorporation
  5. Main place of trade economic activity
  6. Country of sale & purchase
  7. Country of supply
  8. Location of major assets

Sources of funds and wealth – Examples of unclear sources of wealth may include:

  • Money from overseas investments
  • Wealth generation from cash activities
  • Wealth from informal arrangements with family or from trust or foundation structures
  • Asset values and stable income levels don’t match or make little sense
  • Customers unable to provide adequate documentary evidence of source of wealth.

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Iain Hoggarth

Iain Hoggarth

Iain has been in the banking industry for about two decades. He has spent a large part of his career in commercial and corporate finance in both the frontline and risk functions. Iain has worked for large banks, small funds and has spent time in consultancy.

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