The Financial Action Task Force (FATF) has released new guidance aimed at helping countries and financial institutions strike a better balance between combating financial crime and promoting financial inclusion.
The updated framework encourages the use of a proportionate, risk-based approach to anti-money laundering (AML), counter-terrorist financing (CTF), and counter-proliferation financing (CPF) measures.
The guidance builds on FATF’s earlier revision of Recommendation 1, which reinforces the need for AML/CFT/CPF controls to be implemented in a way that does not unnecessarily exclude low-risk individuals from financial services. FATF argues that by reducing barriers to entry, particularly for disadvantaged and underserved communities, countries can strengthen both financial integrity and access.
FATF president Elisa de Anda Madrazo said, “Bringing more people into the formal financial sector is crucial to our fight against financial crime, as it reduces the size of the black and informal markets where criminals and terrorists hide their operations. But it also addresses a clear injustice in our society. Financial exclusion largely affects people in disadvantaged and vulnerable communities. In the majority of cases, these people are not higher risk but are excluded from financial services due to cost or lack of formal documentation.”
The guidance includes examples from jurisdictions that have successfully implemented risk-based strategies to expand financial access. In Sweden, the Bankers Association worked with the Swedish Migration Agency to create a process for verifying asylum seekers’ identities online to open bank accounts. The Netherlands published an industry baseline that categorises AML/CFT measures by risk levels, offering practical guidance on dealing with high-risk countries. Meanwhile, in Singapore, the Monetary Authority partnered with retail banks to provide limited-purpose accounts for higher-risk individuals, such as ex-offenders, while maintaining oversight through enhanced monitoring.
A key message throughout the document is that financial inclusion and AML efforts are not at odds. Instead, enhancing access to regulated financial services strengthens the ability of law enforcement and financial institutions to detect and disrupt illicit financial flows. Risk assessments are central to this strategy, allowing for tailored measures that match the specific risk profiles of customers and contexts.
The updated guidance is the result of an extensive consultation process, drawing more than 100 responses from stakeholders across the public and private sectors, civil society and academia. It includes real-world case studies and practical applications that demonstrate how a risk-sensitive approach can support the twin goals of inclusion and security.
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