Receive our daily newsletter

FinCEN Deputy Director Encourages Anti-Money Laundering Innovation

Christian.Larson@cwt.com's picture
Commentary by Christian Larson

FinCEN Deputy Director Jamal El-Hindi described agency efforts to encourage innovation in anti-money laundering.

In remarks at the 2019 Money Transmitter Regulators Association Annual Conference, Mr. El-Hindi said that innovation and compliance with FinCEN regulations should go "hand-in-hand." Mr. El-Hindi pointed to the role artificial intelligence can play in reducing false positives, and the potential for blockchain technology to enhance rather than decrease transparency in customer identity and transaction profiles. Both were themes that emerged from the agency's recent "Innovations Hours" meetings with FinTech and RegTech companies.

Mr. El-Hindi reported that FinCEN has enhanced the supervision of nonbank financial institutions by:

  • conducting examinations of "rapidly evolving" financial services providers, including virtual currency exchangers and administrators;

  • identifying data to support FinCEN's analytic endeavors; and

  • developing a stronger framework for risk assessments of the nonbank financial sector.

Mr. El-Hindi also asserted that the basic understandings that underpin the culture of compliance in the United States may differ in other countries. Mr. El-Hindi encouraged firms to foster discussions with their non-U.S. colleagues to address these cross-cultural issues.

Commentary

While many Americans are familiar with the idea of "see something, say something" and are comfortable questioning authority, some people in other countries are not. Mr. El-Hindi points out that a different set of cultural "norms" does not necessarily preclude a culture of compliance. This is an unexpected discussion from a U.S. regulatory agency, but fitting given FinCEN's recent role at the helm of the Financial Action Task Force and the audience for Mr. El-Hindi's speech: money transmitters with operations around the globe.

Email me about this

Premium Content

Available only to Cabinet Premium subscribers.

 

Tags

Activities: 
Body of Law: 
Jurisdiction: 
Organization: