While there is a myriad of reasons why financial access is unavailable or limited, my focus today is on how risk management in the AML or financial crime prevention areas impacts compliance or business decision-making.
As I indicated in November, when the financial sector receives limited or conflicting advice and counsel regarding how best to manage risk, the logical response by some financial institutions is to exit or not onboard certain classes of customers. The result is that victims such as non-profit organizations (NPOs) in conflict zones and other troubled areas do not receive funding for water, utilities and other life-saving resources that are so desperately needed for survival. Again, make no mistake-- banks and other financial institutions should be free to decide if they can ultimately manage risk, but they shouldn’t be forced to exit account relationships because of confusing and conflicting oversight or due to the sometimes-uninformed opinions of some examiners that a financial institution should not bank a type of customer or a specific customer. Sadly, this confusion is both not new and continues today. To read more, click here.