Nordic Banks Collaborate To Improve AML, KYC

Five of the biggest banks in the Nordics are teaming up to create a joint anti-money laundering infrastructure.

According to the Financial Times, after some of the lenders were criticized by regulators for a lack of preventative controls, Sweden’s Handelsbanken, Nordea and SEB — along with Denmark’s Danske Bank and Norway’s DNB — joined forces to launch a venture to develop know-your-customer (KYC) infrastructure.

The venture, which will be called Nordic KYC Utility, will launch in the second half of this year pending approval from EU competition authorities. The new company can offer its services to third parties as well as the five banks. Initially, it will focus on large and medium corporate customers, with the possibility of expanding to retail customers in the future.

“The banking community is continuously facing more regulations and requirements related to KYC processes. There is hence a need for a consolidated, efficient and accurate way to serve customers, banks and society,” the five banks said in a joint release.

Most recently, Denmark’s Financial Supervisory Authority gave Danske eight reprimands over its weak anti-money laundering controls that resulted in concerns over suspected “criminal activities involving vast amounts of money” at the Estonian bank.

Nordea and Handelsbanken were already previously fined by Swedish regulators for lax controls. In addition, Handelsbanken was heavily criticized by U.K. regulators for serious weaknesses in combating financial crime.

For now, the venture will focus on the banks’ biggest business customers before they expand the services to additional clients.

“We have been discussing for some time if there’s a possibility to join forces and have some standardized processes,” one banker said.

While money laundering is a major concern, some aren’t convinced that more regulation is the answer. Rob Wainwright, the former head of the EU’s law enforcement agency Europol, said earlier this year that banks were spending $20 billion on anti-money laundering compliance to get back just a tiny fraction of criminal assets.


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