2023-05-18
Information exchange, technology and effective data management prevent money laundering
The importance of effective data management and active exchange of information between institutions was underlined by the representatives of the Bank of Lithuania at the international AML conference: On the Front Line of the New Reality.
“With the rapid growth in the number of payment service users and their geographical spread, data management and exchange of information between institutions both within and beyond the borders of the country are becoming particularly important, especially since financial services have already become global. Moreover, we aim to promote the responsibility of financial institutions and the financial literacy of their clients,” says Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania.
At the conference Gediminas Šimkus presented active efforts in the fight against money laundering and terrorist financing, as well as fraud, and Simonas Krėpšta, Member of the Board of the Bank of Lithuania, discussed the ecosystem, challenges of and opportunities for the prevention of money laundering in the Baltic states, while Edita Lukaševičiūtė, Head of Data Governance Division of the Bank of Lithuania, emphasised the importance of data management for financial institutions in the fight against financial crime.
Financial institutions are obliged to know their customers, as well as collect and update data on them, the amount of which is constantly growing. These data are used to enforce internal processes and customer risk assessment, and are submitted to the supervisory authority. However, collecting and storing data is not enough, effective management is even more important. The Bank of Lithuania comprehensively assesses the key stages of the data value chain – data collection, analysis, dissemination – and aims to ensure that all processes are effective and contribute to reducing the administrative burden. It is the comprehensive data management strategy that helps to obtain the highest value from data, and the Bank of Lithuania shares this experience with the financial market. In addition, the aim is to take into account the technological potential of the future, such as artificial intelligence, machine learning, to manage the ever-increasing flow of information.
It is also essential to recognise money laundering and terrorist financing as an international organised crime, and it is therefore important to continuously strengthen both interinstitutional and public-private cooperation, both domestically and abroad. The Bank of Lithuania, together with other institutions and the Center of Excellence in Anti-Money Laundering, is taking the initiative to enable financial market participants to exchange information about clients, especially in case of suspected cases of fraud. Lithuania is constantly strengthening its competences in the prevention of money laundering and terrorist financing, allocating more resources and expanding its expertise, all of which reflect Lithuania’s desire for the European Anti-Money Laundering Authority (AMLA) to be established in Vilnius.
The Bank of Lithuania aims to make the prevention of money laundering and terrorist financing an integral part of financial services, while financial institutions would consider it as an integral part of business and reputation. In this regard, the Bank of Lithuania maintains a continuous constructive dialogue, provides consultations, organises trainings and provides recommendations.
The central bank notes that non-compliance of a financial market participant with anti-money laundering and terrorist financing requirements can came at a price – this year alone, one institution’s licence was revoked and fines were imposed for half a million euro.
Keynote speech by Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania