The Swiss Financial Market Supervisory Authority (FINMA) has sharpened its focus on money laundering prevention, publishing a new supervisory notice that highlights both progress and persistent shortcomings in the way banks and FINIG institutions conduct risk analysis. The regulator insists that risk analysis must serve as the strategic backbone of anti-money laundering (AML) management.
Progress Since 2023 Guidance
The latest notice builds on FINMA’s May 2023 guidance, which set out clear expectations for how institutions should define and apply risk tolerance. Since then, more than 30 banks and a range of FINIG institutions have been reviewed. FINMA acknowledges that many institutions have made strides: banks now define their risk tolerance more clearly, and frameworks for risk analysis have become more structured. FINIG institutions, too, have begun applying the principles outlined in the earlier notice.
Persistent Weaknesses
Despite these improvements, FINMA warns that significant gaps remain. Some institutions fail to explicitly exclude certain countries, customer segments, services, or products from their risk tolerance, or they apply exclusions that do not align with their business models. Methodological principles are not always applied consistently, and the depth of analysis varies widely. While FINIG institutions may justifiably use less detail due to lower inherent risks, FINMA stresses that methodological standards must be applied uniformly across the sector.
Strategic Importance of Risk Analysis
FINMA underscores that risk analysis is not a box-ticking exercise but a strategic steering instrument. It defines an institution’s risk tolerance, sets binding parameters for organization and controls, and ensures that resources are allocated in a risk-oriented manner. Without robust risk analysis, AML frameworks risk becoming ineffective and leaving institutions exposed to financial crime.
Looking Ahead
The regulator’s message is clear: Swiss banks and FINIG institutions must refine their risk analysis practices to meet supervisory expectations. By strengthening exclusions, applying methodology consistently, and treating risk analysis as a central management tool, institutions can better protect themselves and the Swiss financial centre from money laundering threats.
FINMA acknowledges progress but demands more rigor. Risk analysis must evolve from a compliance exercise into a strategic instrument guiding the fight against financial crime.
Source: finma.ch