Banking & Financial Services in Emerging Markets

Banks must implement a full compliance framework, including:

• Customer Due Diligence (CDD) and KYC

• Sanctions and PEP screening

• Transaction monitoring for suspicious activity

• Risk-based onboarding and client risk rating

• Reporting of suspicious transactions (STRs)

• Internal training and regular audits

These obligations are enforced by local regulators and based on FATF guidelines.

Banks should:

• Verify identity using national IDs, biometric tools, or eKYC

• Assess client risk by type (e.g. business vs individual), geography, and account activity

• Apply Simplified, Standard or Enhanced Due Diligence depending on the risk level

• Maintain a risk profile that’s updated over time

Anqa Compliance Nature and Purpose has you covered.

Banks must screen clients and transactions against global and local sanctions lists (e.g. OFAC, UN, regional lists). Failing to detect a sanctioned entity can result in serious penalties and reputational damage.

• High-volume cash deposits

• Frequent cross-border transfers to unrelated parties

• Shell companies or complex ownership

• Clients refusing to share source of funds

• Matches on sanctions or PEP lists

EDD is required for high-risk clients such as:

• Politically Exposed Persons (PEPs)

• Clients in high-risk jurisdictions

• Complex corporate structures

• Accounts with suspicious transaction patterns

EDD involves verifying source of funds, performing deeper background checks, and requiring senior-level approval.

Common methods include:

• Setting transaction thresholds and alerts

• Flagging unusual transaction patterns (e.g. rapid movement of large funds)

• Cross-checking customer profiles against watchlists

• Using automated monitoring tools like Anqa’s transaction screening engine

Banks should watch for:

• Sudden large cash deposits

• Third-party payments without clear purpose

• Frequent international transfers to unrelated parties

• Use of shell companies or layered ownership structures

• Clients resisting KYC requests

The AML compliance officer is responsible for:

• Designing and maintaining the AML framework

• Monitoring implementation of controls

• Filing Suspicious Transaction Reports (STRs)

• Liaising with regulators and auditors

• Ensuring staff are trained and aware of AML obligations

Start with:

• Affordable AML software (like Anqa) to automate CDD and transaction monitoring

• Free training modules for staff

• Risk-based checklists to guide onboarding and periodic reviews

• Using centralized KYC utilities where available (e.g. in India or Nigeria)

Penalties vary by country but can include:

• Regulatory fines (sometimes in the millions)

• Freezing or closure of accounts

• Loss of correspondent banking relationships

• Criminal liability for executives

• Reputational damage and media scrutiny