Inspection plan of the Bank of Lithuania focuses on anti-money laundering and cyber risk management
The Bank of Lithuania has published this year’s financial market participants inspection plan which targets 34 financial institutions. The inspections will mainly focus on anti-money laundering and counter terrorist financing as well as information and communication technology (ICT) and cybersecurity risk management.
“Publicly available inspections prompt openness of the financial market and give more clarity as to our priority supervision areas. In addition to inspections and assessment visits, we plan to carry out a significant number of analyses and research into various areas which we will be proactively sharing with all financial market participants. We will also submit recommendations and send out Dear CEO letters and continue to organise trainings. Each year we also pay much attention to organising consultations with market participants,” says Simonas Krėpšta, Member of the Board of the Bank of Lithuania.
In addition to the areas mentioned, the Bank of Lithuania will carry out inspections of credit risk management, implementation of international sanctions, provision of investment services, offering of investment products and compliance with internal control requirements.
According to this year’s inspection plan, the Bank of Lithuania experts intend to carry out inspections of the following financial market participants: 17 electronic money and payment institutions, 5 insurance undertakings, 4 banks, 3 independent credit intermediaries related to real estate, 2 issuers, 1 credit union, 1 financial brokerage firm and 1 management company. They have been selected in accordance with the principles of risk-based supervision and expert assessment. The inspection plan is available here.
In addition to routine inspections and taking into account market participants’ operational changes and complaints as well as risk assessment, the Bank of Lithuania also conducts inspections that are not pre-announced. Inspections of banks directly supervised by the European Central Bank might be also carried out (in cooperation with experts from the European Central Bank).
Plans for routine inspections have been published by the Bank of Lithuania since 2017 to ensure smoother and more constructive cooperation between the supervisory authority and financial market participants. Announcing inspections in advance also serves as a preventive measure: financial institutions are able to assess potential operational shortcomings and eliminate them in advance. This results in a much faster and more efficient inspection process.