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Data Privacy and Anti-Money Laundering for Banks

The International Institute of Finance (IIF) stated that one of the major factors hindering anti-money laundering for banks is a lack of information-sharing.  However, stringent data privacy regulations have been introduced which make it difficult for any organization to share information. The European Union’s General Data Protection Regulation (GDPR) helps protect personal information by placing severe limitations on data processing. These limitations in-turn affect financial institutions and their AML or KYC procedures. GDPR doesn’t only affect financial institutions, but anyone who does business in Europe. Truth Technologies supports complex data protection policies that can be viewed here. It is difficult to find a way to continue to share invaluable data, without breaking any regulations. The IIR suggests that the methods of how banks may share personal data with one another needs to be harmonized. Information should be shared if it helps comply with AML laws.

Complying with AML/KYC regulations can be very costly and still may not effectively stop all financial crime. If banks can only analyze their own data, how can the investigators get a full idea of any suspicious activity? Some AML/KYC solutions, like Sentinel, support data lists which allow name-screening processes to assist with AML. Privacy-Enhancing Technologies (PETs), which allow for data processing without compromising security, may also be the answer. Anti-money laundering in banks is important, but so is protecting an individual’s personal information. Both technology and regulations need to work together to help prevent financial crime.

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