Five Dutch banks are looking into setting up an organization that can monitor payment transactions as part of efforts to combat money laundering and the financing of terrorism.
ABN AMRO Bank NV, ING Groep NV, Rabobank, Triodos Bank NV and Volksbank NV, along with Dutch banking association Nederlandse Vereniging van Banken, will study in the next six months whether the establishment of Transaction Monitoring Netherlands is feasible given the "technical and legal challenges" involved.
"The combining of transactions effected by the various banks is expected to make it easier to spot flows of criminal funds," NVB said in a statement.
In the new plans, the lenders are looking for cooperation with the Netherlands' Financial Intelligence Unit, Public Prosecution Service, anti-fraud agency FIOD and government ministries, according to the statement. Other banks will also be able to join the initiative at a later stage.
The lenders are also seeking to jointly build algorithms to identify illicit activity, ABN Amro Chief Technology Officer Christian Bornfeld told Bloomberg News in an interview. Bornfeld also sees similar collaborations being potentially undertaken by banks in other European regions over the next few years, but said he is "less optimistic" regarding such collaborations between lenders across Europe.
A string of money laundering scandals has tainted the image of some major European banks, and regulators are focused on tightening controls.
In 2018, Dutch central bank DNB warned that a number of Dutch lenders have "faulty client and transaction monitoring," allowing clients to use accounts for money laundering and other criminal activities.
ABN Amro recently said it increased provisions for its client due diligence program after the Dutch central bank ordered the lender to review its retail banking clients in the Netherlands, in addition to an already running due diligence of the group's corporate bank and its international card services. Rabobank has also been asked by the national regulator to run additional checks on a group of its clients whose accounts the lender has labeled as low-risk.
Meanwhile, ING Groep previously set an internal target to complete by the end of 2019 the review in its know-your-client enhancement program, including a groupwide review of client files launched after the bank was fined for weak anti-money laundering controls in September 2018.
