Going forward, financial companies must set up dedicated anti-money laundering (AML) departments and regularly conduct in-house money laundering risk assessments that reflect their business characteristics.
The Financial Intelligence Unit (FIU) said on the 27th that it held the "Anti-Money Laundering Related Agencies Council" at Government Complex Seoul with 16 related institutions and discussed these measures. The council was attended by the banks, financial investment, life insurance, non-life insurance, specialized credit finance, Fintech, online investment-linked finance (P2P), lending industry, the casino association, savings banks, NongHyup, the National Federation of Fisheries Cooperatives, the National Credit Union Federation of Korea, the National Forestry Cooperative Federation, the Korean Federation of Community Credit Cooperatives (KFCC), and the Digital Asset eXchange Alliance (DAXA).
The council was prepared to check domestic money laundering risks and vulnerabilities in the financial sector based on the results of the National Risk Assessment (NRA) completed at the end of last year. As measures to strengthen the financial sector's AML response capabilities, the FIU proposed four areas: ▲ risk assessment ▲ governance establishment ▲ system advancement ▲ stronger roles for associations and central federations.
First, financial companies agreed to regularly conduct in-house money laundering risk assessments that reflect the characteristics of their industry and each company's business. In areas where vulnerabilities are revealed by the assessment, the plan is to prioritize the投入 of personnel, budgets, and information technology (IT) infrastructure to build management frameworks that match the level of risk.
AML organizations at nonbank financial companies will also be strengthened. The FIU noted that many financial companies outside the banking sector either have no dedicated AML unit or have staff handling AML in addition to other duties. It was also pointed out as a vulnerability that rotational assignments make it hard to build expertise and that in many cases non-executive employees serve as AML reporting officers.
The FIU will encourage financial companies to establish dedicated AML departments and will pursue measures to raise the rank of reporting officers. It also plans to expand professional staff with IT and data analytics skills to respond to new money laundering methods.
Gaps in AML systems among financial companies will also be narrowed. While banks are increasingly using artificial intelligence (AI) to improve the accuracy of detecting suspicious transactions, the FIU judges that some high-risk sectors and small and midsize financial companies could become "loopholes" for money laundering due to insufficient investment. In response, it will expand the adoption of AI-based detection technologies and diversify detection rules that identify dispersed or bypass transactions. It will also establish procedures to regularly verify the accuracy of data entered into systems.
Industry associations and central federations will run an "AML advancement task force (TF)" starting in the second half of this year. The TF will pursue six tasks: sharing the latest money laundering cases and overseas trends, preparing industry-specific standard guidelines, developing joint suspicious transaction report (STR) detection rules, supporting the establishment of joint systems, providing practical training and consulting, and strengthening inspections and sanctions by central federations.
Ha Jusic, FIU director of system operations planning, said, "As money laundering methods become more diverse and complex, financial companies' responses must move beyond simple system upgrades or formal regulatory compliance to substantive controls."