Every year, financial service providers are required to complete an extensive questionnaire from the Dutch Authority for the Financial Markets (AFM): the Market Monitor for Advisors and Intermediaries (MMAB). The insights gathered from this questionnaire are used to support AFM’s risk-based supervision. It has become a tradition for the regulator to publish a number of quantitative and qualitative findings, resulting in several reports this year.
AML Risks
This year, the MMAB focused on the Anti-Money Laundering and Counter-Terrorism Financing Act (Wwft) as it pertains to life insurance intermediaries and advisors under the National Regime. The publication acknowledges that the risk of money laundering in life insurance is low. Nevertheless, it is crucial for gatekeepers to remain vigilant against potential risks.
Concerns
A significant portion of financial service providers lacks a risk assessment of their own organization (approximately 60%) or an AML policy (over 50%). Notably, the percentage of compliant businesses has decreased compared to the findings from three years ago. Additionally, more than half of the financial service providers take insufficient measures to mitigate money laundering risks. The AFM finds this worrisome and is unlikely to leave the matter unaddressed.
The regulator also identified inherent risks associated with money laundering. For example, a small number of financial service providers still accept cash payments. Some have clients residing in high-risk countries, and a quarter serve clients working in high-risk sectors.
Training
Employee and management training is another area requiring attention. Nearly two-thirds of financial service providers offer AML training to their staff. However, less than half of policymakers have undergone training on AML or sanctions regulations in the past 24 months.
Consolidation and compliance
Quantitative insights into revenue and office size provide a clear picture of the sector’s development. The AFM highlights sector consolidation, emphasizing the importance of ensuring that acquisitions align with the buyer’s operational processes. Additionally, the regulator underscores the need for robust compliance functions to support controlled and ethical business operations.
Next steps
The AFM has repeatedly emphasized the importance of ongoing licensing requirements and controlled, ethical business practices in financial services. It is expected that the MMAB findings will lead to further action. Financial service providers that are not yet fully compliant should prioritize updating their policies, risk assessments, and training programs.
How Projective Group can assist you
Projective Group can help you establish an effective AML policy and conduct a comprehensive risk assessment. At The Ministry of Compliance, we also offer a wide range of e-learnings to help your team gain a thorough understanding of AML requirements at every level.
