As the world continues to respond to the COVID-19 pandemic, criminals around the world are taking advantage of the situation, finding new ways to generate illicit funds.
As such, the fight against Money Laundering and Terrorist Financing (ML/TF) remains more important than ever. The year 2020 saw a wide range of emerging ML/TF risks on a global scale, including government and private sectors’ abilities to implement Anti-Money Laundering and Counter Terrorist Financing (AML/CTF) obligations from supervision, regulation and policy reform to suspicious transaction reporting and international cooperation.
Our survey’s objective was to better understand the current AML/CTF landscape in Luxembourg in order to analyse the state of play around these topics. It also highlight the key challenges faced by the various industries in terms of AML/CTF compliance, whilst providing an industry-wide benchmarking standard for clients to measure themselves against in future.
AML/CTF environment overview
AML challenges keeping the financial sector busy:
- Increased regulatory pressure;
- Maintaining KYC up-to-date;
- Manual processes in the wider AML/CTF context. The top
three rank at the top in almost each sector, closely followed by data quality management.
Technology
On the investment side, a clear trend concerns automatisation/digitalisation, data clean-ups and CDD improvements.
It is fair to assume that the three are interdependent and digitalisation plays a key role, but it also shows that so far there was likely more talking about it then walking the talk.
In fact, technology is supposed to get more traction looking forward, which is not surprising given the fact that this area was less focused on it in the past.
Outsourcing
AML/CTF related processes are an often-debated topic for outsourcing. When looking at our results it seems to have clear value in certain contexts but is also not the ‘silver bullet’ it is often referred to as. The “biggest” appetite seems to be around periodic KYC reviews and screenings.
Many respondents in Luxembourg are moving towards strategic investment in AML/CTF resources in-house, demonstrating the continued importance and critical nature of the subject matter to most. When asked how they forecast the evolution of their AML/KYC team, more than half respondents forecast that the size of their AML/CTF team will increase.
AML Governance
Strong AML governance needs awareness and the level of awareness about the importance of AML/CTF is crucial for its success.
It is reassuring that awareness is very high at the level of Senior Management and Control functions, demonstrating a strong “tone from the top”, since the Board of Directors also score very high.
“The recent past has seen a lot of new developments and trends in the technology field and in the options available to transform and digitalise the AML/CTF environment."
Interested to receive the full report?
Our Luxembourg AML Survey 2020 main report will be released soon. If you wish to receive the full version once available, fill in the form via the link below:
Contact us
Michael Weis
Advisory Partner, Forensics & Anti-Financial Crime Leader, PwC Luxembourg
Tel: +352 49 48 48 4153
Birgit Goldak
Risk Assurance Partner, AML Services Leader, PwC Luxembourg
Tel: +352 49 48 48 5687
Murielle Filipucci
Tax Partner, Global Banking & Capital Markets Tax Leader, PwC Luxembourg
Tel: +352 62133 31 18
Pierre Kirsch
Tax Partner and Authorised Manager of the PSF, PwC Regulated Solutions S.à r.l.
Tel: +352 62133 40 31
