The Financial Action Task Force (FATF) has initiated a public consultation to update its guidance on Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) measures, with a focus on promoting financial inclusion. This move aims to address the unintended consequences of stringent AML/CFT regulations that may inadvertently exclude legitimate individuals and businesses from the financial system.

The updated guidance emphasizes a risk-based approach, encouraging the implementation of simplified measures in lower-risk scenarios to facilitate access to financial services. It also highlights the importance of proportionality in AML/CFT measures, ensuring that they do not disproportionately impact vulnerable populations or hinder financial inclusion efforts.

FATF is seeking input from stakeholders on various aspects of the guidance, including the clarity of the discussion on financial inclusion, the sufficiency of guidance on assessing lower-risk areas, and the adequacy of explanations on recently adopted standards. Additionally, the consultation invites feedback on the roles of supervisors and regulated entities in implementing a risk-based approach that promotes financial inclusion.

This consultation represents an opportunity for financial institutions, compliance professionals, and policy makers to contribute to the development of balanced AML/CFT measures that safeguard the financial system while promoting inclusive access. Finassent encourages stakeholders to participate in the consultation process and to consider how their compliance frameworks can align with the evolving guidance to support both security and inclusivity in the financial sector.

Source: Public Consultation on AML/CFT and Financial Inclusion – Updated FATF Guidance on AML/CFT Measures and Financial Inclusion
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