Swiss Financial Market Supervisory Authority supplements money laundering risk analysis guidance after finding gaps at banks and FinIA institutions

The Swiss Financial Market Supervisory Authority has issued supplementary guidance on money laundering risk analysis, adding further observations to Guidance 05/2023 after reviewing banks and FinIA institutions. The update recognises progress, particularly by banks in defining risk tolerance and structuring their analyses, but finds that both banks and FinIA institutions still need to improve how risk analysis is used as a key control and management tool in anti-money laundering frameworks. The follow-up work covered some of the risk analyses of more than 30 banks inspected in spring 2023, as well as numerous other banks and FinIA institutions. FINMA indicates that the methodological principles in Guidance 05/2023 also apply to FinIA institutions, although the level of detail may differ because they generally face lower risks. Weaknesses included the absence of explicit exclusions for certain countries, client segments, services or products, or exclusions that did not match the institution's business model, as well as incorrect application of methodological principles when carrying out the analysis.