Bank de-risking pushes clients into unregulated arena
Rigorous due diligence requirements on banks are prompting them to axe financial services for some industries and countries, nudging those former clients towards less transparent and potentially illicit ways of managing customers' money, say AML experts in the financial industry
Faced with increasingly strict regulation on financial transactions, banks have responded by dropping certain types of clients altogether rather than carrying out costly due diligence on them.
Advisers to financial companies warn that the result may be the opposite of what regulators want: more, not less, financial crime. Regulators' view: those banks are trying to avoid rather than assess risk.
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