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In Growing AML and Privacy Demands, Banks Find a Quandary, Says Author
printAs the European Union weighs a new raft of data protection standards, some bankers believe that they can't meet both anti-money laundering demands and Europe's privacy expectations, according to Michelle Frasher, author of the forthcoming Information Statecraft: States, Financial Institutions, Individuals and the Politics of Counter-Terrorism Data. Under a proposed bloc-wide directive, EU member-states would adopt uniform standards to limit the sharing of personal data, including financial information. But since a $1.9 billion settlement with HSBC USA in 2012 for failing to monitor trillions of dollars in wires, banks with American operations have conversely faced pressure to share compliance information...
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Several of the world's largest financial institutions are years into the process of rethinking and updating how they share the personal information of their customers across borders to thwart illicit finance.
Taskforce Sees Need to Extend AML Duties, Strengthen Safe Harbor Protections: U.S. Treasury Official
The United States should shore up safe-harbor protections for banks and extend new anti-money laundering duties to check cashers, credit card systems operators and others, a U.S. taskforce has found.
An expected strengthening of data privacy standards in Europe and elsewhere could hinder efforts by multinational banks to share information on suspicious clients with their foreign affiliates, say current and former U.S. officials.
U.S. law enforcement officials and regulators have queried the nation's financial intelligence unit about securities settlements that use the world's top financial messaging platform, according to the agency's director.
Countries should ease their privacy restrictions that hinder cross-border data-sharing on suspicious transactions, according to a Toronto-based intergovernmental group of financial intelligence units.
The rejection by the EU Parliament Thursday of a data sharing agreement with the United States is likely to leave U.S. investigators without timely access to European banking data for the second month in a row.
EU party leaders have rejected delaying a Thursday vote on an interim agreement to share European financial data with U.S. counterterrorism investigators.
A renewed emphasis on customer data privacy in the European Union is making it difficult for U.S. financial institutions to conduct background checks on EU customers, and in some cases has exposed them to fines, according to legal consultants.
European Union justice ministers agreed Friday on guidelines for the sharing of personal data among law enforcement agencies and European courts, giving European citizens greater assurances of privacy in terrorism and criminal cases.
Because data protection laws in Europe and elsewhere make it difficult for a multinational financial institution to share data among all of its branches, the laws "will be the biggest impediment to protection from terrorism," the officials said.
The agreement, announced June 27, resulted from months of negotiations after an EU advisory panel found that the consortium's sharing of information with the United States violated EU data protection laws.
Financial institutions, in attempting to minimize data breaches, often focus their budgets on systems meant to foil sophisticated hackers rather than guard against employee mistakes, such as losing a mobile device, and other vulnerabilities that cause most breaches.
Plans for a national identification system that would require personal information to be stored in state-controlled databases will boost bank costs associated with large-scale data breaches, according to privacy consultants and information policy analysts.
The U.S. Senate Commerce Committee approved a bill Wednesday that would require all companies handling customer financial information to adopt data protection standards and notify consumers when their information is exposed.
An EU advisory panel determined that an international banking consortium violated data protection laws there when it complied with a U.S. administrative subpoena giving the Bush administration access to millions of private financial transaction records.