Dutch Banks Team Up to Fight Dirty Money
Dutch Banks Team to Fight Dirty Money
(Bloomberg) -- Five of the largest Dutch banks are exploring jointly monitoring transactions in the fight against money laundering.
Firms including ING Groep NV, Rabobank and ABN Amro Bank NV are studying whether a joint venture is feasible given “the technical and legal challenges involved,” Dutch banking association NVB said in a statement on Friday. Apart from sharing information about transactions, the banks are also looking to build algorithms together to identify illicit activity, said Christian Bornfeld, chief technology officer at ABN Amro.
“Every bank has a different risk appetite when it comes to things like lending out money, but when it comes to money laundering and terrorist financing, that risk appetite for every bank is simply zero,” Bornfeld said in an interview. “So I think we can operate a single set of algorithms.”
That team spirit is part of an effort to move beyond a series of scandals in Europe that have exposed structural weaknesses in the region’s fight against flows of illicit money. ING -- the largest Dutch bank -- last year paid 775 million euros ($858 million) to settle an investigation, the largest fine in Dutch corporate history.
A group of Nordic lenders including scandal-ridden Danske Bank A/S said in July they are moving forward with plans to establish a joint venture to develop a platform for handling due-diligence data on customers. The Dutch initiative, by contrast, is about jointly monitoring transactions.
In the new plans, the Dutch banks are looking for cooperation with the Financial Intelligence Unit (FIU), the Public Prosecution Service and the government. Last year, banks in the Netherlands reported 68,000 unusual transactions to the FIU. Looking at broader range of transactions may make it easier to spot flows of criminal funds.
In July, the government sent proposals to the lower house of parliament, including a legal change that should make it possible for banks to share information about unusual customers. The plan for a joint monitoring system is in response to that initiative, said the banking association.
ABN Amro’s Bornfeld thinks that similar collaborations may happen in other European regions in the coming years. He is less optimistic about a European-wide cooperation between banks. “That will maybe happen in five to eight years,” he said.
To contact the reporter on this story: Ruben Munsterman in Amsterdam at rmunsterman1@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel, Ross Larsen
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