The Swiss Financial Market Supervisory Authority (FINMA) comprehensively reviewed over 30 Swiss banks earlier this year and found that a large number of these did not comply with the basic requirements to manage money laundering risks.
Swiss banks struggle to control money laundering risks
FINMA indicated it conducted this review because, when doing routine inspections, many institutions fell short regarding money-laundering risk analyses. FINMA did not name the banks in question but found the situation problematic as Switzerland is the world’s go-to for wealth management. The authority stated that:
FINMA reviewed risk analyses of over 30 banks in spring 2023. In doing so, it was found that a large number of the risk analyses examined did not meet the basic requirements for such an analysis.
Setting limits to decrease money laundering risks was one of the areas where banks failed. These findings come in the wake of the Boston Consulting Group’s Global Wealth Report 2023, which predicted that Hong Kong is well on its way to overtake Switzerland as the global hub for wealth management.
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Although well-known for its discreet banking practices, Switzerland recently moved for more transparency by proffering information to aid in the battle against tax evasion. In acknowledging that Swiss banks should do more to combat money laundering, FINMA provided those who came up short with guidelines and a table of categories to help with the implementation of better controls.
In 2022, Credit Suisse received a penalty of more than $2m for its negligence in money laundering involving a Bulgarian crime syndicate. This famous Swiss finance giant has since been taken over by UBS.
