The Danish Financial Supervisory Authority (DFSA), announced that blockchain proved its potential in a test in its regulatory sandbox, known as FT Lab. However, it can be difficult to determine how to handle services based on blockchain within the existing regulation. DFSA expects that the current issues, when using blockchain as an infrastructure for payment services, will be addressed at the European Union level, including in the upcoming review of the Payment Services Directive. The test also showed that blockchain-based payment services have the potential to compete with existing payment solutions that use the existing payment infrastructure. In a separate assessment, DFSA investigated transaction monitoring at the seven largest banks in the country. The study showed the need for changes and improvements in a number of areas and this finding applies to both the monitoring systems and the procedures in the field.
The study on transaction monitoring was conducted with the assistance of international consulting firms—Deloitte, McKinsey & Company, and Duff & Phelps, to carry out inspections of transaction supervision in seven largest banks in Denmark—Jyske Bank, Nykredit, Spar Nord Bank, Handelsbanken, Sydbank, Danske Bank, and Nordea Danmark. The study investigated bank compliance with rules in the area of money laundering and terrorist financing (or ML/TF)DFSA Finds Improvements Needed in ML/TF Monitoring and Payments Rules and monitored the quality of transactions. DFSA concluded that monitoring scenarios should be flexible and constantly evolving to enable banks to consider developments in their risks, including new forms of crime and new methods of money laundering and terrorist financing. DFSA also emphasized that trade finance transactions and capital market transactions must be monitored with increased focus on money laundering and terrorist financing. There is a need for banks to spend significant resources on updating and improving their transaction monitoring and alarm processing.
- Press Release on Blockchain (in Danish)
- Assessment on Blockchain Use in Payment Services (PDF)
- Press Release on Transaction Assessment (in Danish)
Keywords: Europe, Denmark, Banking, Blockchain, Regtech, Bank Transaction Monitoring, ML TF Risk, AML CFT, DFSA
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.