The European Banking Authority (EBA) has investigated emerging use of technology tools (‘SupTech’) in facilitating anti-money laundering (AML) and countering the financing of terrorism (CFT), and concluded in a new report that these do indeed support the work of national competent authorities (NCAs) responsible for regulatory actions in their local markets.
The investigation comes pursuant to the new EU AML/CFT framework, including the establishment of the Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA), which will coordinate AML/CFT supervision at EU level.
This establishment offers and opportunity to reassess supervisory approaches, the EBA stated, including looking to technology to enhance oversight. The EBA surveyed NCAs and ran a workshop together with the European Commission’s AMLA Task Force to “identify trends, challenges, and good practices in the use of SupTech in AML/CFT supervision”.
On the basis of these actions, the EBA has issued a report (available here: Report on the use of AMLCFT SupTech tools) including “an overview of current SupTech use across the EU and outlines examples of effective practices in, for instance, change management, data and technology, supervisory and regulatory strategies, that can contribute to a more risk-based, data-driven, and scalable supervisory model under the new AML/CFT framework”
According to the report, some 47% of tools or projects identified are already in production, a further 38% are under development, and 15% in the exploratory phase.
The report finds that NCAs are “already experiencing tangible benefits, including improved data quality, enhanced collaboration, and more efficient risk identification”.
Remaining challenges include limited resources, legal uncertainty, and data governance constraints.
The EBA stated it “will continue to support NCAs and AMLA in strengthening their use of technology and fostering innovation in AML/CFT supervision across the EU”.
