Why has the Swedish Financial Supervisory Authority (FSA) conducted a supervisory review of SEB?
The financial system’s work against money laundering has been brought to the fore in recent years, due to a number of external events and an increased focus on the societal problem that financial crime constitutes.
SEB is subject to various legal regimes and requirements in all jurisdictions where the bank operates. The work of the supervisory authorities involves reviewing whether participants in the financial system comply with the legislation. To be subject to supervision is therefore a natural part of operating a bank. Supervisory authorities regularly conduct reviews of SEB’s regulatory compliance, including areas such as financial stability, transaction reporting, anti-money laundering, investor protection, and data privacy. SEB continuously provides updates about this in its quarterly reports.
What does the Swedish FSA’s decision involve?
The Swedish FSA has, within the remit of its supervisory responsibility, looked at SEB’s routines and processes with regards to the regulatory frameworks that govern anti-money laundering.
The FSA has reviewed SEB’s governance and control of anti-money laundering measures in its Baltic subsidiaries. The decision relates to the time period of 2015 until the first quarter of 2019. The FSA has also reviewed SEB’s routines and processes in the Swedish operations with regards to the regulatory frameworks governing anti-money laundering, related to the second half of 2018.
In the Baltic review, the FSA has decided to issue SEB a remark, which is a lower degree of an administrative sanction that is issued when a breach has not been deemed to be serious. The FSA has also decided to issue SEB an administrative fine of SEK 1bn, which corresponds to about 14 percent of the maximum amount the FSA can impose in this case. In the Swedish review, the FSA has decided to issue SEB a precept to take certain measures to improve its transaction monitoring.
The Swedish FSA has conducted its reviews in cooperation with the Baltic supervisory authorities. The Swedish and Baltic supervisory authorities have hereby concluded their reviews regarding SEB’s anti-money laundering work.
How do you view the criticism from the Swedish FSA?
SEB will now analyse the decision and revert with the bank’s view.
SEB’s ambition is to always adhere to current regulations, high internal standards and ethical guidelines, and to have a high standard for corporate governance, compliance and risk management. SEB works continuously to further strengthen the bank’s abilities.
Does the Swedish FSA’s decision mean that there has been money laundering through SEB?
The Swedish FSA’s supervisory review has not looked at whether the bank has been used for money laundering, but at the bank’s processes and compliance. No bank, SEB included, can guarantee that it has not been or ever will be exploited for attempted money laundering. Our work against money laundering develops, against this backdrop, continuously, not least because crime constantly evolves. Our work in this area will never end.
SEB’s responsibility is to prevent, detect and report suspected crime. It is also to terminate customer relationships if there are suspicions of crime or if the bank does not fully understand why a customer wants to use our products and services. We continuously report suspicious transactions and customer behaviors. SEB’s Baltic subsidiaries have in the past 10 years reported more than 6,000 suspicious cases to the financial police, of which 1,500 in 2019 alone.
Last autumn, SEB published data showing the historical flows at SEB’s Estonian subsidiary, as well as the effects of the measures we have taken. Read more about this in the press release from November 2019 on sebgroup.com
What measures will SEB take?
SEB will now analyse the decision and revert with the bank’s view.
SEB has during a long period of time and at an accelerating pace strengthened the bank’s defenses against money laundering, improved our transaction monitoring and added resources. It is continuous work, where we always strive to get better. The work against money laundering is a priority within the framework of SEB’s current business plan, in which the bank through a dedicated program to prevent financial crime among other things invests in new technology for transaction monitoring. Increased use of artificial intelligence and machine learning will further strengthen the bank’s abilities going forward.
In addition to that, we need even better cooperation throughout society to fight this type of crime. We therefore work to increase cooperation and information sharing between banks, police, authorities and other parts of society.
Could you have done anything differently?
SEB’s ambition is and has been to – at any given moment in time – adhere to the current legislation as well as the bank’s ethical guidelines and high internal standards as well as having a high standard for corporate governance, compliance and risk management.
We work intensively with these questions and have done so for a long period of time. But when we look back at history with our current knowledge and the current legislation in mind, there may be certain measures we could have taken earlier. Over the years, the rules have been sharpened, awareness has increased, and the bank’s routines and processes have been improved. Our systems are not perfect, but we work continuously to strengthen our abilities to prevent, detect and report potential cases of money laundering.
Read more about how SEB works with preventing money laundering and other financial crime