Banks struggle with tough rules on beneficial ownership

Governments around the world are raising the pressure on banks to prevent illicit money flows, taking their cue from guidelines by the Financial Action Task Force (FATF). Whether it is to stop money laundering, terrorism financing or sanctions violations, banks seek closer knowledge of their corporate customers and their true owners

As national regulators adopt global standards on beneficial ownership, banks are tightening their systems and processes to prevent illicit transactions by customers. And the costs of compliance are rising.

Financial transparency has moved up government agendas since FATF, the international standard setter, set out recommendations on beneficial ownership in 2012. These are aimed at identifying true owners of shell companies or complex corporate structures, which money launderers, supporters of