Latin American banks turn to Swift in financial crime fight

Eight Latin American central banks have adopted Swift’s financial crime compliance solutions to enhance transparency and combat financial crime.

Belize, Bolivia, Costa Rica, Curacao, Dominican Republic, Ecuador, Haiti and Paraguay implemented the solutions, including Swift’s Know Your Customer Registry and Sanctions Screening tools, the global financial messaging system announced Tuesday. Latin America has been one of the regions most affected by de-risking in recent years, or the closing of business because it's deemed high risk for money laundering or other crimes, which can adversely impact access to broader legitimate banking in a region.

The increasing de-risking problem – when banks cut their foreign correspondent banking relationships by exiting certain jurisdictions, product domains and currencies partially or fully – has become so extreme that banks are now faced with having to address it. However, the focus of the problem has shifted from a commercial issue to one of financial inclusion, according to Fedra Ware, who leads Swift compliance services for Latin America.

Marcelo Perez del Carpio/Bloomberg

“Implementing the right compliance controls within an organisation, as well as ensuring enhanced transparency and collaboration between private and public entities, is critical to avoid being on the receiving end of a de-risking decision,” she said in a news release.

The number of Latin American institutions adopting Swift’s financial crime compliance tools has nearly doubled in less than a year, as a result of a regional effort by some of the central banks who endorsed the adoption of the KYC Registry across their entire jurisdictions.