Ani Filipova

The EBA has released its 2025 Opinion on money laundering and terrorist financing risks. And for those of us in compliance, it confirms what we’ve been feeling for a while: Financial crime and compliance is getting more complex. According to the report: → 69% of national regulators say ML/TF risks in FinTech remain high or have increased. → 64% report growing exposure to cybercrime and digital fraud. → Nearly half say institutional controls are still falling short, especially in CDD and transaction monitoring. 𝗙𝗶𝗻𝗧𝗲𝗰𝗵: 𝗜𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝘀𝘁𝗿𝗼𝗻𝗴 𝗰𝗼𝗻𝘁𝗿𝗼𝗹𝘀 FinTech is expanding access to financial services - but many providers are still behind on basic AML/CFT standards. ↳ Poor understanding of ML/TF risks ↳ Over-reliance on third parties without proper oversight ↳ Weak governance and underdeveloped compliance cultures 𝗥𝗲𝗴𝗧𝗲𝗰𝗵: 𝗚𝗼𝗼𝗱 𝘁𝗼𝗼𝗹𝘀 𝗯𝘂𝘁 𝗼𝗳𝘁𝗲𝗻 𝘂𝘀𝗲𝗱 𝗯𝗮𝗱𝗹𝘆 RegTech has real potential. But in practice, it's often implemented without enough internal expertise or oversight. The EBA notes: → Over half of serious compliance failures reported to EuReCA involved improper use of RegTech. → Many institutions rely on the same few RegTech providers using "off-the-shelf" tools that don’t fit their risk profile. → This is especially problematic in credit and payment institutions, where risk exposure is already high. Because without adequate governance, skills, and supervision, even the best tools can increase exposure. 𝗖𝗿𝘆𝗽𝘁𝗼 𝗿𝗶𝘀𝗸𝘀 𝘀𝘁𝗮𝘆 𝗵𝗶𝗴𝗵 𝘄𝗵𝗶𝗹𝗲 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀 𝗰𝗮𝘁𝗰𝗵 𝘂𝗽 Despite new regulations, crypto-related ML/TF risks remain high. The number of registered providers in the EU has grown 2.5 times since 2022 - but many of these firms are still operating without robust AML frameworks. ↳ Attempts by some CASPs to bypass registration altogether ↳ Ongoing concerns around poor governance and internal controls ↳ A lack of transparency, especially at senior management level 𝗦𝗮𝗻𝗰𝘁𝗶𝗼𝗻𝘀: 𝗚𝗿𝗼𝘄𝗶𝗻𝗴 𝗿𝗶𝘀𝗸, 𝗴𝗿𝗼𝘄𝗶𝗻𝗴 𝗴𝗮𝗽𝘀 As sanctions regimes become more complex, many institutions are struggling to keep up. The EBA highlights that: → Screening tools often fail to capture non-standard or sectoral sanctions → PSPs face heightened risk through SEPA instant payments → Fragmented data in card payment systems can lead to unintentional breaches 𝗔𝗜: 𝗔 𝘁𝗵𝗿𝗲𝗮𝘁 𝗮𝗻𝗱 𝗮 𝘁𝗼𝗼𝗹 Criminals use AI to automate laundering, generate fake documents, and evade CDD. Many institutions still lack the expertise to manage these risks - or to govern their own use of AI. The EBA stresses the need for: ↳ Strong oversight ↳ Skilled teams ↳ Real-time detection capabilities According to the EBA opinion, financial crime risks are increasing. But so is regulatory attention. The question is: Are you proof-ready for the future?

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🎭 Every investigation into beneficial ownership is a backward journey: a progressive unmasking. At first, you find those who appear in the registers (when such registers exist): ▪️ #Owner: the formal proprietor, the one whose name appears on the documents, but often only nominally. Then come those who truly benefit: ▪️ #BeneficialOwner: individuals who gain from the structure, sometimes acting through intermediaries, fiduciaries, or other legal vehicles. And finally, after several layers, holding companies, and complex arrangements, you reach: ▪️ #UltimateBeneficialOwner: the natural person or persons who ultimately exercise control or derive the final benefit. Behind each mask lies a different degree of #transparency. Each layer removed brings us closer to the essence of #AML #duediligence: understanding who controls, who decides, and who truly benefits. #compliance #complianceofficer #followyhemoney #dirtymoney #antimoneylaundering #UBO

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THE AML/CFT CULTURE PYRAMID Many institutions excel at building the foundation - policies, procedures, and documentation. But few invest in the top: leadership, accountability, and culture. That’s where true compliance lives or dies. ⏳🗓️ Coming Next Monday, 8 September 2025: AML/CFT Insights continues with “The Risk Culture Gap: Why AML/CFT Compliance Fails in Financial Institutions.” I will explore how cultural blind spots and weak governance quietly erode even the most robust compliance programmes. #AML #CFT #ComplianceLeadership #RiskCulture #FinancialIntegrity #AMLInsights

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Risk Management: Why it Matters 1. Benefits of Risk Management • Value Protection – Safeguards assets, people, reputation, and operations. • Business Continuity – Ensures resilience during disruptions and crises. • Informed Decision-Making – Provides data and foresight to balance risk vs. reward. • Regulatory Compliance – Reduces legal, reputational, and financial penalties. • Financial Stability – Minimizes unexpected losses and enhances resource allocation. • Stakeholder Trust – Builds confidence with investors, customers, employees, and partners. • Strategic Advantage – Enables organizations to anticipate change and seize opportunities. 2. Role of the Board in Risk Management • Oversight – Sets the tone for risk culture and governance. • Policy & Framework – Approves the risk management framework, appetite, and strategy. • Monitoring – Ensures effective implementation and regular risk reporting. • Accountability – Holds management accountable for managing risks. • Integration – Aligns risk considerations with strategy, performance, and sustainability. 3. Why Boards Care About Risk • Protecting Shareholder Value – Avoiding losses that erode company value. • Reputation & Legacy – Safeguarding corporate image and brand equity. • Regulatory Scrutiny – Boards are personally accountable for risk failures. • Strategic Survival – Unmanaged risks can derail long-term growth plans. • Stakeholder Expectations – Investors, regulators, and society demand strong governance. • ESG & Sustainability – Increasing pressure to address environmental, social, and governance risks. 👉 In essence: Risk management matters because it protects value, enhances resilience, supports strategy, and ensures accountability. Boards play a central role by embedding risk into governance and caring because unmanaged risks threaten both corporate survival and board accountability. For customized consultancy services/trainings, contact #SmkSowalandAssociatesUG Tel: +256702865035 Email: [email protected]

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**Wolfsberg Group Statement – Transitioning to Innovation in AML Monitoring** The Wolfsberg Group have released Part II of its Statement on Effective Monitoring for Suspicious Activity – and it marks an important shift. The message is clear: traditional, rules-based transaction monitoring is no longer enough. Financial institutions must move towards innovation – AI, machine learning, and automation – to stay ahead of increasingly sophisticated criminal networks. The Group lays out three pillars for responsible adoption: Transition and validation – moving beyond legacy systems, focusing on outcomes not volumes, and ensuring investigators are equipped to handle more complex, AI-driven alerts. Balancing model risk versus financial crime risk – recognising that financial crime models cannot be treated the same as prudential or financial models; innovation requires agility, not endless red tape. Explainability – being able to explain model outputs clearly to regulators, investigators, and senior management. My opinion: Wolfsberg is right. We cannot cling to outdated approaches that generate noise rather than insight. The future of monitoring lies in combining human expertise with advanced technology to produce better quality intelligence, not just more alerts. But innovation must be responsible – transparent, explainable, and risk-based – otherwise we risk losing the trust of regulators and law enforcement. This is a pivotal moment for the industry: will we embrace smarter, outcome-focused monitoring, or remain trapped in legacy archaic systems? What do you think – is your organisation ready to make this transition? This is where my colleagues at Silent Eight can help you. Please reach out! #antimoneylaundering #moneylaundering #aml #financialcrime #transactionmonitoring

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Operational Resilience in Action: Lessons from DORA I recently attended PRMIA - Professional Risk Managers'​ International Association Bahrain’s chapter event on Operational Resilience: First Lessons from DORA, and it couldn’t have come at a better time. As someone deeply involved in #risk and #resilience within #financial #services, the discussion offered both strategic clarity and practical insights. 🔐 What stood out most was the shift from traditional recovery models to proactive resilience planning. DORA isn’t just another regulation it’s a mindset change. From scenario-based testing to #thirdparty #oversight, the framework challenges us to rethink how we safeguard critical services in an increasingly digital world. 💡 I’m especially inspired by how DORA elevates the role of risk professionals placing us at the heart of #operational #continuity, #governance, and #cyber preparedness. Grateful to PRMIA and Justin C McCarthy PRM, ORM for fostering such a forward-looking conversation. Looking ahead, I’m excited to apply these lessons in shaping more resilient, adaptive risk frameworks. Special thanks to Dean Rowan for getting the group together and the diversified attendees from #regulators to colleges in #Bahrain and #Saudi #DORA #OperationalResilience #RiskManagement #PRMIA #CyberRisk #Governance #FinancialServices #Bahrain

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Most compliance officers in regulated industries will never unlock their full potential with AI. But you could. And it's not because of: • Legacy system complexity. • Regulatory uncertainty. • Risk tolerance levels. • Technical limitations. • Budget constraints. The no.1 barrier keeping compliance teams from AI success comes down to one misconception: Replacement anxiety. You're not being replaced by AI. You're being equipped with the tools that you need to amplify and accelerate growth. The humans who leverage AI strategically are the ones who win long-term. If you're smart, you'd: • Automate routine monitoring tasks. • Generate audit trails with precision. • Flag anomalies faster than manual review. • Scale oversight without scaling headcount. Free yourself from repetitive work so you can focus on strategic risk assessment. That's how it should be. Your expertise becomes more valuable when paired with AI.

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