The efforts of banks in Estonia to combat money laundering must be more successful
The precept issued by Finantsinspektsioon on Thursday shows that although Swedbank has invested in the fight against money laundering, it has not been successful enough in preventing it. Nevertheless, the banks in Estonia have taken some successful steps under the anti-money laundering rules in recent years. Equally, the financial position of the banks is good enough for them to be able to put better and smarter anti-money laundering systems in place.
The reports by the financial supervisors in Estonia and Sweden show the problems in preventing money laundering were at the group level in Swedbank, which includes the Estonian branch. For this reason they need to be resolved at the level of the whole group.
Swedbank is a systemically important bank for the stability of the financial system in Estonia, and it provides banking services that are vital for the Estonian economy. Swedbank has sufficient capital, liquidity and organisation to provide banking services to people and businesses in Estonia while at the same time complying with the anti-money laundering requirements.
“Banks are of critical importance for the normal functioning of an open and exporting economy like Estonia’s. Even though stricter anti-money laundering requirements may upset the clients of the banks, those rules need to be followed because Estonia is not a place where money can be laundered,” said Deputy Governor of Eesti Pank Maive Rute.
The banks have closed the current accounts of their riskiest clients in recent years and have become more careful about starting new client relationships. This reflects a change in the behaviour of all the banks, including Swedbank. The banks have started to apply stricter anti-money laundering measures, and they have been pushed to do so by the confident and dedicated work of Finantsinspektsioon.
Ms Rute added that the banks in Estonia should target their anti-money laundering efforts better and more cleverly to maintain trust in themselves. This would require staff to be trained more extensively and new technological solutions to be brought in. “The amount of information processed by the banks continues to grow, and without smart information systems in place the risk of money laundering cannot be managed successfully in real time. A good place to start in solving the problems is for banks and business associations to work together to find solutions that would allow money-laundering risks to be minimised better without honest business suffering for it,” she said.