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Due to the size of the market and the wealthy clients it looks after, where it is more common for them to move large sums of money, private banking is a prime target for money launderers.

 

There’s no questioning the attractiveness of the high-net worth environment that is private banking and wealth management to money launderers. As you work with a portfolio of very wealthy and powerful clients with high-value transactions there are many inherent risks and factors that contribute to the increased risk and vulnerability when it comes to money laundering.


As this environment differs so heavily to a retail banking environment, switching from low-value and high-volume transactions to high-value and low-volume transactions, transaction monitoring differs greatly for your sector. With challenges such as a high-volume of detection on transaction-based scenarios, segmentation and financial groups, risk assessing high-net worth takes on a whole new meaning.

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Complimentary report:
Managing money laundering risks for high-net worth individuals

In this complimentary report, we discuss the challenges of managing money laundering and transaction monitoring in this sector. With insights into risk assessing high-net worth clients and the tailored needs for high-value transaction environments, covering AML compliance, Know Your Customer, sanctions requirements and the need for granular segmentation and data segregation.
 

A glimpse inside...

Also unlike retail banks and their average customer, you have a close one-to-one relationship with clients. Your relationship managers have a particularly important role within the firm by managing and controlling the money laundering or terrorist financing risks it faces. However, wealthy clients often have business affairs and lifestyles that may make it difficult to establish what is “normal” and therefore what constitutes unusual behaviour. 

 

As a result, the level of customer due diligence (CDD) is considerably higher than in retail banking. A relationship manager must record visit’s to client premises, reference and reputational searches, and an in-depth review of a client’s personal information before the new relationship is approved as part of enhanced due diligence, particularly for politically exposed persons (PEPs).

 

Private banking institutions tend to involve their relationship managers more as part of their investigation process. However, while your relationship managers can be pulled into the compliance process on a ‘need to’ basis, there is a need to closely control access to compliance related information.

Managing money laundering risks for high-net worth individuals

 Download the report

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