Swiss Regulator Finds Gaps in Banks’ Money Laundering Risk Analysis.

Switzerland’s financial regulator FINMA has found that while banks and other financial institutions have strengthened their anti-money laundering (AML) measures, significant weaknesses remain in how they assess and manage risk.

In a report published on Thursday, FINMA stated that Swiss banks, asset managers, and other financial institutions are still not consistently applying robust risk analysis frameworks. The regulator emphasized that institutions must make better use of existing tools to identify and monitor high-risk financial activity.

Following a review process launched after investigations in 2023, FINMA examined the risk assessments of more than 30 banks and conducted additional supervisory checks across the financial sector. The findings revealed recurring shortcomings in how risks are recorded and evaluated.

According to FINMA, some institutions failed to document risks in sufficient detail, while internal control exceptions were applied too broadly. In addition, warning indicators designed to detect suspicious activity were often too weak or not clearly defined, increasing the chance that problematic client relationships could go unnoticed.

The regulator highlighted particular concerns around politically exposed persons (PEPs), complex corporate structures, and the growing use of crypto-related financial services. These areas, FINMA warned, require enhanced scrutiny due to their higher exposure to money laundering risks.

Although Switzerland’s financial sector has made progress in strengthening compliance systems, FINMA stressed that further improvements are necessary to ensure effective risk detection and prevention. The authority called on institutions to tighten internal controls and improve the quality of their monitoring processes.

The report reinforces Switzerland’s ongoing efforts to maintain the integrity of its banking system while adapting to increasingly complex global financial risks.