Specialised Solutions for Non-bank Deposit Takers’ AML/CFT Compliance

We offer a comprehensive set of anti-money laundering (AML), counter-terrorist financing (CTF), and fraud prevention solutions tailored to non-bank deposit takers’ anti-money laundering, and aligned with the requirements of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, the New Zealand Reserve Bank’s (RBNZ) AML/CFT guidance, including sector-specific red flags and indicators for this sector, to help your business meet applicable obligations that cover NBDT money laundering and terrorist financing risk mitigation, fraud prevention, the detection and handling of other types of financial crime.

We have designed our AML solutions to help you navigate the complexities of the non-bank deposit takers’ AML requirements in a commercially oriented and goal-focused manner, providing effective AML/CTF support for all aspects of NBDT AML/CFT compliance, including but not limited to:

• Business Profile and Strategic Factors:
• Your commercial objectives
• Your products
• The size and structure of your business
• Your available AML/CTF compliance technology and resourcing
• Your risk appetite for AML/CTF-related risks
• Your governance framework and reporting lines
• Your client demographics
•  Your countries of operation

 

• Applicable Regulatory and Fraud Prevention Obligations:
• AML/CTF regulations for non-bank deposit takers
• Any NBDT fraud prevention obligations or expectations your business may be subject to
• Any related compliance obligations, including, but not limited to, non-bank deposit takers’ obligations under:

• Privacy laws
• Financial market laws
• Fair trading laws
• Financial licensing requirements
• Other relevant regulatory frameworks

• Operational AML/CTF Compliance Requirements:

• Money laundering and terrorist financing (ML/TF) risk assessment
• AML risk management
• Customer due diligence (CDD) and Know Your Customer (KYC) obligations for non-bank deposit takers
• Enhanced customer due diligence
• Ongoing customer due diligence and transaction monitoring
• PEP identification and sanctions compliance
• Staff vetting and AML/CTF training
• Ad-hoc and periodic reporting
• Other obligations relating to non-bank deposit takers' anti-money laundering, counter-terrorist financing and sanctions compliance, as well as financial crimes prevention

 

 

What Jurisdictions Do Our NBDT AML Solutions Cover?

This page is about our sector-specific NBDT AML solutions in New Zealand. For AML/CFT services for this industry in other jurisdictions, you can visit the following pages:

• NBDT AML Solutions in Australia: Where NBDTs are equivalent to authorised deposit-taking institutions (ADIs) under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and are subject to Australian AML/CTF Rules.
• NBDT AML Solutions in the United Kingdom: Where NBDTs are equivalent to building societies and credit unions, operating under the Money Laundering Regulations 2017 and their subsequent amendments.
• NBDT AML Solutions in the United States: Where NBDTs are equivalent to savings and loan associations and credit unions under the Bank Secrecy Act (BSA) and supervised by FinCEN.
• NBDT AML Solutions in Singapore: Where NBDTs are equivalent to finance companies and non-bank financial institutions (NBFIs) under Singapore’s Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act and Terrorism (Suppression of Financing) Act.

 

 

Which Types of Businesses Do Your NBDT AML Solutions Cover?

Focusing on money laundering (ML), terrorism financing mitigation (TF) and fraud prevention, our non-bank deposit takers’ AML solutions cover the following types of financial service providers and financial institutions that are deemed to be AML/CTF reporting entities (aka “designated service providers” or “obliged entities”):

• Finance Companies
• Credit Unions
• Building Societies
• Friendly Societies
• Community Savings Organisations
• Non-Bank Lenders
• Wholesale NBDTs
• Foreign NBDTs Expanding to New Zealand: We assist with meeting regulatory obligations under the New Zealand AML/CFT Act 2009, New Zealand NBDT AML requirements, and AML/CFT guidance by the Reserve Bank of New Zealand (RBNZ).
• Other Non-Bank Deposit Takers subject to New Zealand NBDT AML requirements

Additionally, we offer AML/CFT support for related financial services to help resolve NBDT money laundering, NBDT fraud, and terrorism financing issues across profit-generating activities, such as trading, lending, funds management and more.

 

NBDT AML Advisory and Support

Our AML/CFT advisory services for non-bank deposit takers include, but are not limited to, the following:

• Detailed AML/CTF compliance advice: Tailored to the non-bank deposit takers’ AML requirements for different processes, including but not limited to customer due diligence (CDD), transaction risk scoring, transaction monitoring, customer onboarding and know-your-customer (KYC) analysis, and other AML processes. Also tailored to the specific money laundering and terrorist financing (ML/TF) risks involved in these processes, helping you with effective ML/TF risk management.
• NBDT fraud risk management advice: Advising on measures, controls, and processes for detecting, preventing, and responding to different types of fraud, scams, and other types of financial crime relevant to non-bank deposit takers. Also, tailored to NBDT fraud environment, risk management practices, and stakeholders' expectations and obligations (banks, regulators, insurers, shareholders, etc.).
• Banking relationships advice: Advising non-bank deposit takers on AML/CTF issues related to maintaining and expanding their banking relationships, complying with banks' AML/CTF risk appetite standards, recall procedures and expectations, and other operational requirements.
• Operational AML/CTF advice: Advising support and KYC teams on day-to-day onboarding, support queue management processes, allocating AML/CFT resources effectively, and making operational improvements to enhance overall customer experience and AML compliance efficiency.
• Specific matter advice (difficult clients, high ML/TF risk matters, customer due diligence for high-net-worth clients, complex transactions and more): Advising on handling specific AML/CTF issues related to clients and complex and unusual transactions, including assessing the adequacy of Sources of Wealth (SOW) or Source of Funds (SOF) information and documentation for specific enhanced due diligence (EDD) cases.
• Peer benchmarking and best practices: Helping non-bank deposit takers compare their AML/CFT practices with industry standards, AML/CTF supervisor guidance, and internationally recognised best practices set up by international organisations like the Financial Action Task Force (FATF) for complying with NBDT AML/CFT obligations.
• Government agencies liaison advice: Advising senior management and compliance teams on handling relationships with external bodies, including AML/CTF supervisors and law enforcement agencies, such as the FIU or its local equivalents.
• AML/CFT audit advice: Advising senior management and compliance teams on matters related to the statutory AML/CFT audits, including auditors' guidelines, requirements, AML/CFT audit process, and obligations related to the audit's outcome, tailored to both generic non-bank deposit takers’ anti-money laundering compliance obligations and your specific situation.
• AML/CFT remediation advice: We help non-bank deposit takers to effectively navigate situations involving an AML/CFT breach, warning, or investigation. The cost of non-compliance can result in significant regulatory fines and penalties, as well as irreparable reputational damage. Therefore, when you are on your supervisor's radar, it’s essential to have AML/CFT advisors who know how to set things right and effectively engage with AML/CFT supervisors and other stakeholders. For more details, please visit our Remediation Solutions page.
• Further information: You can visit our AML advisory page for an extensive list of AML/CFT advisory services we offer to support non-bank deposit takers’ anti-money laundering compliance, as well as AML/CFT compliance for other types of financial institutions and businesses subject to the AML/CFT regime.

 

 

AML/CFT Training and Capacity Building

We offer the following set of AML/CFT training and education solutions tailored to  NBDT  AML/CFT compliance requirements:

• Customised AML/CFT Training Solutions: Specialised AML training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on the non-bank deposit takers’ AML requirements, AML/CFT awareness, best practices, and ML/TF red flags.
• Up-to-date Regulatory AML Updates: Keeping your compliance officers, managers, and teams updated with changes in the non-bank deposit takers’ requirements, AML regulations and guidance.
• Workshops on Emerging Trends and Red Flags: Advising on new AML trends, red flags, and typologies relevant to NBDT money laundering, terrorist financing, fraud, and other types of financial crime.
• Practical Workshops: Interactive workshops for effective and goal-oriented AML/CTF compliance, capacity planning, and resource allocation, covering:

• KYC procedures for non-bank deposit takers
• KYB analysis and ML/TF risk assessment application to specific clients, transactions and situations
• The NBDT money laundering risks, common money laundering schemes and terrorist financing methods
• Improvements in clients' onboarding and transaction monitoring procedures
• Reg-tech for AML compliance
• Internal and external AML/CTF reporting
• Related risk and compliance issues, including financial crime prevention
• Application of the risk-based approach to NBDT money laundering, fraud risks, and terrorism financing
• Suspicious matter reporting guidelines
• The implementation of customer identification programs and KYC procedures
• Strategic and operational ML/TF risk management
• AML/CTF specifics of the cross-border deposit taking and lending solutions
• Other obligations related to the non-bank deposit takers’ AML requirements

• Practical Compliance Applications: Ensuring the practical application of training, focusing on real-world NBDT money laundering, terrorist financing, and common NBDT fraud scenarios, as well as specific challenges related to the NBDT AML/CTF compliance that your business is likely to face.
• Further information: You can visit our AML training solutions page for an extensive list of AML/CFT training solutions we offer to non-bank deposit takers and other businesses subject to AML/CFT regulations.

 

Comprehensive AML/CFT Managed Solution for Non-bank Deposit Takers

Our NBDT AML/CFT compliance management solutions include but are not limited to:

• AML/CFT Compliance Leadership: We act as your dedicated AML/CFT compliance officers (aka “Money Laundering Reporting Officers” or (MLROs)) and as compliance managers, fully managing AML/CFT compliance and handling the non-bank deposit takers’ anti-money laundering obligations for your business.
• Non-Bank Deposit Takers’ Anti-Money Laundering Risk Management: Conducting detailed assessments to identify ML/TF risks, assess their inherent impact and likelihood of occurrence for your business, evaluate the effectiveness of mitigations and controls in place, and formulate residual risk ratings.
• Managing Client Onboarding process and Customer Due Diligence: Implementing effective Know Your Customer (KYC), Know Your Business (KYB), customer due diligence (CDD), and enhanced due diligence (EDD) processes, for all types of clients, including higher ML/TF risk clients.
• PEP and Sanctions Screening: Managing thorough compliance with AML surveillance requirements by screening against global sanctions and politically exposed persons (PEPs) lists. This covers both initial and ongoing screening, as well as escalation processes for true positives.
• UBO Verification Streamlining: Verification of beneficial ownership in line with the non-bank deposit takers’ AML requirements, identifying and assessing individuals who hold ultimate control over assets. This includes initial and ongoing checks, with procedures to address discrepancies and high-risk cases as they arise.
• AML Transaction Monitoring: Developing and implementing a set of business-specific ML/TF alerts and red flags to detect and report suspicious transactions, helping you comply with the non-bank deposit takers’ AML requirements in a commercially efficient manner without making AML/CFT compliance a business hindering factor.
• Transaction Monitoring and NBDT Fraud Prevention Solution: Related to the above, we also help with the implementation of fraud alerts and red flags to detect, prevent, and respond to fraudulent transactions and activities.
• AML/CFT Tech Handling: Leading the alignment of AML/CFT technology implementation with your business processes and AML/CFT objectives. This also includes reviewing AML/CFT technology against the non-bank deposit takers’ AML requirements and your core policies and procedures.
• AML/CTF and Data Sharing: Handling information requests from law enforcement agencies, AML/CTF supervisors, and other relevant AML/CTF-designated entities—such as your banking partners, FX platforms, liquidity providers, finance providers, etc.—to help you manage your AML/CTF compliance-related communications.
• Internal AML/CFT Reporting Solutions: Facilitating structured reporting workflows for your board and its delegate committees, with a specific focus on AML/CFT compliance. This includes:

• preparing and presenting comprehensive AML/CFT performance metrics
• providing insights into AML/CFT compliance effectiveness
• reporting on the effectiveness of internal controls and mitigations for your general AML/CFT obligations and the sector-specific NBDT money laundering risks
• identifying areas for improvement

Our AML/CFT compliance reports cover:

• your ongoing compliance status in relation to non-bank deposit takers’ AML requirements
• ongoing progress against your organisation-wide AML/CFT compliance calendar
• alignment of your business's AML/CFT performance with specific project goals and relevant KPIs
• other factors to ensure that the management function is well-informed and aligned with the AML/CFT compliance requirements for non-bank deposit takers.

• Non-Bank Deposit Takers’ AML/CFT Compliance and Externally Reportable Matters: Implementing effective external reporting procedures to help you comply with non-bank deposit takers’ anti-money laundering requirements for reporting captured activities and transactions. This includes managing externally reportable matters covered by the following report types: Suspicious Activity Reports (SARs), Suspicious Matter Reports (SMRs), Suspicious Transaction Reports (STRs), Prescribed Transaction Reports (PTRs), Threshold Transaction Reports (TTRs), and their equivalents.
• Periodic AML/CFT Reporting: Organising and overseeing the preparation, data storage, and effective submission of required periodic reports to your AML/CTF supervisors, helping you comply with non-bank deposit takers’ AML requirements for statutory reporting.
• NBDT Fraud Prevention Management: Implementing targeted fraud prevention measures, enhancing internal controls, and helping you comply with internal policies and external regulations. We work to mitigate fraud risks without disrupting business processes, aligning fraud prevention efforts with your broader compliance objectives.

 

KYB Solutions for Non-Bank Deposit Takers’ Anti-Money Laundering Compliance

We offer a range of KYB solutions to help you effectively comply with non-bank deposit takers’ AML requirements. These include:

• Establishing ML/TF risk scoring models and parameters for different risk categories: We establish criteria to assess the ML/TF risk levels of your client base by identifying key risk factors based on their business nature, activities, jurisdictions, and other relevant characteristics and develop a risk scoring model to classify clients into different ML/TF risk categories such as low, medium, and high risk.
• Implementing a Customised KYB Process: We can help you roll out the KYB process across all departments to help your teams become sufficiently trained and equipped to handle clients' ML/TF risk effectively when it comes to verification, monitoring, ongoing due diligence, and other processes.
• KYB Technology and Automation: We select and evaluate technologies that can automate various parts of the KYB process, such as data collection, risk scoring, sanctions screening solutions, and ongoing monitoring.
• KYB-Related Escalation Process: We can develop and implement a clear escalation procedure for handling high-risk clients or irregularities, including the triggers for escalation, the actions required at each step, and the responsibilities for resolving these issues.

 

 

Core Policies and Procedures for NBDT AML/CFT Compliance

We develop, enhance, and implement a set of core policies, manuals, frameworks, and procedures for effective NBDT AML/CFT compliance management, including the following:

• NBDT AML/CFT Framework Development: Covering specific non-bank deposit takers’ AML requirements and obligations under national AML/CTF laws and regulations, any applicable AML/CFT guidance, your risk appetite, your existing human and technology resources, your business structure, your history of AML/CFT compliance, and your current and future business goals.
• AML/CTF Risk Assessments: Focused on the non-bank deposit takers’ AML requirements for risk management as they relate to specific ML/TF risks faced by your business in terms of its size, products, client types, jurisdictions of operation, delivery channels, and the financial institutions it interacts with when delivering its services. Also covering the assessment of the effectiveness of existing controls and mitigations in place to determine the residual risk rating for both general ML/TF risks relevant to the most designated service providers/AML/CFT reporting entities and industry-specific ML/TF risks faced by non-bank deposit takers as these apply to your business operations. Visit our AML/CTF Risk Assessment page for more information.
• Comprehensive AML/CTF Programs (aka "AML/CFT Programme" in some jurisdictions): When it comes to non-bank deposit takers’ anti-money laundering compliance, your AML/CFT program is a core document that details how your business complies with various compulsory AML/CFT obligations, covering:

• the initial and ongoing CDD and EDD processes
• verification methods and requirements for identity, address, and source of funds
• internal and external reporting
• ongoing due diligence
• transaction monitoring
• employee vetting and training
• PEP and sanctions screening, and more

 

Our NBDT AML solution is about grounding your AML/CTF program in reality and developing it based on your circumstances, including:

• your AML/CFT Risk Assessment
• your available ML/TF systems and controls
• your available resources
• your compliance budget
• your AML/CTF compliance team's experience and size
• your stakeholders' interests
• your available AML technology and other relevant factors
• Further Information: Visit our AML/CTF Programs page for more information

• NBDT AML/CTF Procedures for Effective AML Compliance: Effective procedures are another core pillar of NBDT AML/CTF compliance. This is why our solutions cover the development and enhancement of a detailed set of AML/CTF procedures and protocols to meet the distinct needs of your business, with a focus on effective AML risk management across various business processes and the non-bank deposit takers’ AML requirements as they apply to each step of your customer journey.
• AML Manuals and Guidelines: These are more detailed, practical resources that support the procedures by providing step-by-step instructions, specific reference points, and standards. Depending on your business size and complexity, we develop and enhance internal manuals and guidelines necessary for effective and efficient AML/CTF compliance. These include AML Operating Manuals, guiding materials, and guidelines that outline what to do for each process, step, or decision within your procedures.
• ML/TF Controls Mapping: Implementing controls based on your documented risks is another cornerstone of non-bank deposit takers’ anti-money laundering compliance. We help you develop, map, and assess your internal ML/TF controls and improve their effectiveness to ensure compliance with non-bank deposit takers' AML requirements, address specific financial crime, money laundering, and terrorist financing trends, and respond to any findings from internal and external AML/CFT auditors and supervisors.
• AML Red Flag Identification and Response Protocols: This is another area where a well-written AML policy or program must face the reality of operational speed, the workload across different teams, available tools, client base size, and other factors. That is why another part of our NBDT AML/CFT solution focuses on developing clear guidelines for identifying and responding to red flags indicative of fraud, money laundering, or terrorist financing activities, enabling you to take timely and appropriate action in different circumstances.

• AML/CTF Policy Update: Assisting with the review and enhancement of your core AML/CTF documents and operational procedures to reflect changes in your AML policies, including those caused by:

• updates in the AML/CTF laws, NBDT AML regulations or AML supervisors’ sector guidance
• internal changes in your business structure, size, and resources
• the launch of new products or expansion to new jurisdictions
• changes in your risk appetite
• changes in related obligations, such as privacy laws, information sharing, NBDT fraud prevention requirements, and more
• AML/CFT issues identified during internal or external reviews or audits
• other relevant factors

 

AML/CFT Technology Integration Support

Streamlining AML Compliance: Our NBDT AML solutions include needs assessment and assistance in selecting and integrating appropriate AML technologies for efficient non-bank deposit takers’ anti-money laundering compliance management. This includes AML compliance technologies and tools that cover:

• Customer Due Diligence Automation
• E-KYC and Online Identity Verification
• Customer Onboarding Streamlining
• PEP and Sanctions Screening
• Ultimate Beneficial Owner (UBO) identification,
• KYB Solutions and AML/CFT Risk Management
• AML Alert Management
• NBDT Fraud Prevention
• Ongoing Due Diligence Obligations Management
• Internal AML/CFT reporting
• NBDT AML/CFT Obligations for External Reporting
• AML/CFT Incident Management
• Exception Escalation and Management
• AML/CFT Management Automation: Including automated response workflows and AI technology
• Customisable AML/CFT measures specific to onboarding and monitoring of your high ML/TF risk clients
• NBDT AML/CFT obligations for Record-Keeping
• Transaction Monitoring and Surveillance: Including transaction monitoring tools to automate detection and response to NBDT money laundering and terrorist financing red flags
• Effective CRM for Handling Non-Bank Deposit Takers’ AML Requirements

 

NBDT AML/CFT Audit Solutions

Having over ten years of AML/CFT compliance experience, ranging from AML/CFT framework and controls development and testing to successful AML/CFT management and issues resolution for various reporting entities, gives us the necessary expertise and qualifications to be your AML/CFT auditors.

We offer two comprehensive AML/CFT audit options to review your compliance with non-bank deposit takers’ anti-money laundering obligations. These options are:

Statutory AML/CTF Audit Option: A comprehensive review of your existing AML/CTF framework to assess whether your business complies with AML/CTF standards and applicable obligations. We independently test your compliance with both New Zealand’s AML/CTF obligations under the AML/CFT Act 2009 and specific non-bank deposit takers' AML requirements, as overseen by the Reserve Bank of New Zealand (RBNZ). These often include but are not limited to:

• adherence to your AML/CTF risk assessment and operational AML/CFT procedures, including the existence of controls and mitigations to address money laundering and terrorist financing risks identified in your risk assessment
• compliance with your core AML/CFT documents, including sample testing
• your CDD requirements
• your staff vetting requirements
• your AML/CFT management processes
• your client onboarding and offboarding processes
• your EDD requirements, including source of wealth (SOW) and source of funds (SOF) requirements and application of the risk-based approach to different ML/TF risk levels
• your transaction monitoring process, covering large, complex, and unusual transactions and patterns
• your ODD processes
• your record-keeping process
• your suspicious matter reporting process (also known as "suspicious activity" or "suspicious transaction" reporting in some jurisdictions)
• your other reportable transactions process (typically covering cash and cross-border transactions)
• the way you detect and address material changes in client relationships
• your initial and ongoing screening process
• and other obligations for NBDT AML/CFT compliance

Assurance Levels: Our statutory AML/CFT audit options are available as both:

• A limited assurance audit
• A reasonable assurance audit

Further Information: Please visit our New Zealand AML/CFT Audit page for more information.

Internal AML/CFT Audit Option: Apart from an independent statutory audit, we also offer an internal AML audit option to prepare non-bank deposit takers for an external audit by an independent auditor, an AML/CTF supervisor's review, or a review by another significant business stakeholder, such as a banking partner or an equity purchaser. This option is also suitable for significant business events like reorganisation or expansion.

Here, we go beyond merely meeting non-bank deposit takers’ AML requirements and focus on evaluating the effectiveness of your AML/CFT controls and ML/TF risk management processes for alignment with:

• the ML/TF risks faced by your business, including your Know Your Business (KYB) analysis
• Non-bank deposit takers’ anti-money laundering compliance obligations
• your current and future goals
• your business model
• your current and prospective client inflow
• the specific AML/CFT compliance areas or requirements (this process can be tailored to address particular AML issues or compliance areas, ensuring a targeted approach to non-bank deposit takers’ anti-money laundering compliance)

We help you not only identify any gaps and weaknesses but also provide insights on how to enhance your controls and respond to these in a commercially oriented manner for smarter AML/CFT compliance. Please visit our Internal AML/CFT Review Solution page for more information.

 

AML/CFT audit-related solutions:

• Post-Audit Remediation Support: We assist with the implementation of post-audit remediation actions, addressing and resolving any identified AML/CFT issues.
• AML/CFT Attestation Support: Our NBDT AML solutions include helping you prepare the required attestations for your AML/CFT supervisor and other stakeholders. This involves confirming that all necessary remedial actions have been completed and that adequate AML/CFT compliance measures have been put in place.
• Post-Audit Stakeholders' Liaison: We manage your communications with national AML/CTF supervisors, banks, auditors, insurers, and other stakeholders, ensuring smooth progress in reporting on the status and completion of your post-audit action plan.

 

 

NBDT Fraud Prevention Solutions

The non-bank deposit takers’ anti-money laundering control environment is closely related to prevention of financial crime in general, and fraud prevention in particular. NBDT fraud prevention controls and ML/TF controls can form a unified compliance management framework tailored to the specific ML/TF and fraud risks your business is facing or is likely to face. Our NBDT Fraud Prevention Solutions include:

• Fraud Risk Assessment and Analysis: Conducting assessments to identify and prioritise fraud risks across your operations, allowing you to allocate resources effectively.
• Incident Response and Investigation: Creating response plans to manage fraud incidents, including guidelines for investigating, documenting, and applying corrective actions to minimise potential damage.
• Implementing Preventive Measures: Setting up checks, alerts, and controls to tackle fraud risks in the deposit taking sector, as well as drafting a set of procedures and guidelines to address fraud scenarios that you are likely to face or have faced.
• Data Analytics for Fraud Detection: Leveraging data analytics to identify focus points for your fraud prevention efforts and areas for improvement.
• Fraud Detection Technology Implementation: Choosing and helping you implement appropriate technology for real-time fraud detection.
• Fraud Awareness Training: Educating staff about fraud risks, including identity theft and impersonation.
• Further information: Please visit our Fraud Management Solutions page for more information.

NBDT Fraud Response Requirements: In the current risk and compliance environment, implementing fraud prevention measures is either already mandated by law in some jurisdictions or, at minimum, expected by government agencies, financial market participants, and other stakeholders.

 

Broader Risk & Compliance Solutions for NBDTS

Your AML/CFT compliance is generally more effective when the right hand knows what the left hand is doing, and at the very least, they do not interfere with each other. Incorporating your controls and procedures for compliance with the non-bank deposit takers’ AML requirements into an overall risk and compliance management framework efficiently can increase your overall risk compliance effectiveness. This is where our experience can help you. Apart from AML/CFT compliance solutions for non-bank deposit takers, we include the following risk and compliance solutions:

• Compliance Advisory and Management: A comprehensive set of solutions for second-line compliance management, including both compliance advisory and compliance management options. Visit our Compliance Solutions page for NBDTs for more information.
• Third-line Compliance Assurance: A range of third-line compliance defence solutions covering compliance assurance program development and implementation, internal controls design, and controls testing solutions for licensed deposit takers
• ISO Standards Compliance: A range of solutions for compliance with the International Organization for Standardization (ISO) standards, helping you prepare for ISO certification
• FATCA and CRS Compliance: A comprehensive set of solutions for complying with the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) requirements, including tax residency verification, ongoing due diligence, reporting, and record-keeping
• Privacy Law Compliance: A range of solutions covering development, implementation, and testing of data privacy controls, procedures, and tools required to meet the applicable obligations under the Privacy Act, the GDPR, ISO 27701, etc.
• Financial Licensing and Registration: A set of financial licensing solutions for non-bank deposit takers requiring financial licensing to offer their products in regulated financial markets, including preparation, licensing process management, regulator liaison, and post-licensing support in:

• New Zealand
• Australia
• Singapore
• The United Kingdom
• The United States
• Offshore financial centres and tax havens

 

 

Common Money Laundering Risks for NBDTS

NBDT money laundering risk types can be broadly classified into five categories:

• Product types (services offered)
• Delivery methods
• Customer types
• The institutions involved in delivering your services
• Jurisdictions of operation

Given the variety of products offered by different businesses, as well as their different business structures and operations, the examples below of money laundering risks faced by non-bank deposit takers represent only a sample and are not exhaustive.

 

Product-Related Risks and NBDT AML Compliance

Some of the product-related ML/TF risks relevant to non-bank deposit takers’ anti-money laundering compliance include:

• Inadequate Monitoring of Cash Deposits: Lack of mechanisms to detect large or structured cash deposits that could indicate layering or placement of illicit funds.
• Insufficient Verification for Fixed-Term Deposits: Weak controls for verifying the source of funds in fixed-term deposit accounts, increasing exposure to layering risks.
• Weak Controls for High-Interest Deposit Products: Lack of due diligence on customers seeking high-interest deposit products, which could attract individuals looking to place illicit funds for integration.
• Absence of Controls Over Dormant Accounts: Insufficient oversight of dormant accounts that may be used to temporarily hold or layer illicit funds before being activated for transfers.
• Inadequate Screening for Joint Deposit Accounts: Weak controls to identify risks in joint accounts opened with unrelated or high-risk individuals, which could be used to obscure beneficial ownership.
• Misuse of Anonymous or Nominee Deposit Accounts: Failure to prevent or monitor the use of nominee accounts or accounts opened by third parties, facilitating anonymity for illicit fund placements.
• Lack of Oversight for Structured Time Deposits: Absence of mechanisms to identify customers structuring time deposits across multiple accounts to avoid detection thresholds.
• Weak Monitoring of Cross-Border Deposit Transfers: Insufficient controls on deposits originating from high-risk jurisdictions or through international correspondent banks.

 

Jurisdictional Risks and NBDT AML Compliance

Some of the jurisdictional risks relevant to NBDT money laundering prevention include:

• Weak Monitoring of Cross-Border Deposit Transfers: Insufficient controls on deposits originating from high-risk jurisdictions or through international correspondent banks.
• Complications Arising from International Sanctions: Lack of effective mechanisms to navigate sanctions regimes, particularly when company clients
• Inadequate Enhanced Due Diligence for Foreign PEPs: Weak procedures for conducting enhanced due diligence on foreign Politically Exposed Persons (PEPs) linked to jurisdictions with high levels of corruption or financial crime.

 

 

Delivery Method Risks and NBDT AML Compliance

Some of the delivery method-related ML/TF risks relevant to non-bank deposit takers’ anti-money laundering compliance include:

• Weak Controls for Linking Documentation to Customer Identity: Lack of mechanisms to effectively verify and link identification documents to the individual submitting them increases vulnerabilities to identity fraud and impersonation.
• Lack of Screening for Complex and Unusual Transactions: Absence of mechanisms to detect and monitor third-party payments, layered or complex payment structures, and transactions inconsistent with customer profiles increases exposure to ML/TF risks.
• Weak Detection Mechanisms and Alert Systems for Digital Payment Platforms: Insufficient triggers, alert systems, and investigation procedures for detecting suspicious or high-risk transactions conducted through digital payment platforms increase ML/TF vulnerabilities.
• Lack of Controls for Deposits and Payments in Non-Traditional Currencies or Alternative Payment Methods: Failure to assess and monitor deposits made in non-traditional currencies, digital currencies, or currencies subject to currency control laws (e.g., restricted foreign currencies). Similarly, insufficient mechanisms to evaluate and monitor requests to pay interest or withdraw principal in these currencies or through alternative payment methods.

 

Customer Type Risks and NBDT AML Compliance

Some of the customer type-related ML/TF risks relevant to NBDT money laundering prevention include:

• Weak Controls for Verifying Third-Party Depositors: Lack of mechanisms to identify and verify third parties making deposits on behalf of customers.
• Failure to Identify High-Risk Occupations or Industries: Inadequate measures to identify clients operating in industries such as gambling, money remittance, or unregulated financial services.
• Insufficient Due Diligence for Clients in High-Risk Jurisdictions: Absence of enhanced due diligence for customers with connections to jurisdictions with weak AML/CFT measures, high levels of corruption, or organised crime activity.
• Lack of Screening for Complex or Layered Legal Entities: Weak controls to detect complex company structures or trust arrangements designed to obscure beneficial ownership.
• Entities with Minimal Physical Presence: Failure to identify customers whose operations are limited to virtual offices or who lack a tangible presence in the jurisdiction of formation.
• Obscure Beneficial Ownership Across Jurisdictions: Inadequate controls to verify entities where beneficial owners are located in one jurisdiction, bank accounts in another, and operations in a third.
• Overreliance on Self-Declared Customer Information: Dependence on unverified customer-provided data during onboarding without robust verification procedures.
• Lack of Controls for Cash-Intensive Clients: Insufficient risk categorisation and ongoing monitoring for clients from cash-heavy businesses, such as retail or hospitality, which are vulnerable to laundering illicit funds.

 

Institutional Risks and NBDT AML Compliance

Some of the institutional risks relevant to non-bank deposit takers' anti-money laundering compliance include:

• Inadequate Screening of Institutional Clients: Weak verification processes for institutional clients, particularly those with complex ownership structures or links to high-risk jurisdictions.
• Inadequate Oversight of Deposit Brokers and Introducing Agents: Weak monitoring and controls over deposit brokers or introducing agents conducting AML/CFT checks on behalf of NBDTs may result in reliance on substandard due diligence procedures.
• Reliance on Payment Providers Without Sufficient Transparency: Lack of mechanisms to assess and monitor transactions processed through payment providers may prevent NBDTs from identifying the ultimate beneficiaries of deposits and withdrawals.

 

 

Common Anti-Money Laundering Requirements for Non-bank Deposit Takers

Given the variety of NBDT AML requirements, this list is not exhaustive:

• Conducting customer due diligence, including appropriate KYC checks: Ensuring verification of customers’ identities, as well as identities of beneficial owners of customers that are legal entities.
• Conducting transaction monitoring: Monitoring deposits, withdrawals, and other transactions to identify and report suspicious transactions and patterns.
• ODD requirements: Conducting ongoing customer due diligence, which is generally based on the customers' ML/TF risk profiles and ML/TF risk categories, as well as changes in their activities, behaviours, or risk factors.
• Staff Vetting: Performing comprehensive background checks and ongoing vetting of staff to maintain high standards of integrity and awareness.
• Reporting Prescribed Transactions: Obligation to report cross-border or cash transactions over a certain threshold, as per the local AML/CFT regulations, in a timely manner. However, if the transaction is processed through a local bank or another reporting entity, reporting requirements may depend on the local AML/CFT regulatory interpretation by the RBNZ.
• Compliance with the regulatory obligations: Including registering with your local AML/CTF supervisor, appointing an AML/CTF officer or an MLRO, answering requests for information from the police, regulators and your AML/CTF supervisor, filing an annual report and more.
• Regular Staff Training: Providing continuous training to ensure employees are aware of AML/CFT protocols and can recognise red flags.
• Timely Reporting of Suspicious Transactions: Ensuring that suspicious transactions and activities are reported to the relevant authority (either your local AML/CFT supervisor or a financial intelligence unit (FIU)) within the required deadlines.
• ML/TF Risk Assessments: Conducting regular assessments of ML/TF risks faced by your business is a part of AML risk management for NBDT institutions.
• Independent AML/CFT Audits and NBDTs: Organising periodic independent reviews of the AML/CFT program, other core documents, and components of your AML/CFT framework to assess their existence, compliance, application, and, where applicable, effectiveness, depending on local AML/CFT audit guidance.
• Applying EDD measures: Conducting enhanced due diligence on certain customers and certain transaction types.
• Establishing Clear AML/CFT Policies and Procedures: Creating documented guidelines for staff to follow.
• Monitoring PEPs and Sanctioned Entities: Implementing measures for additional scrutiny of politically exposed persons and entities on sanction lists.
• Screening Against Watchlists: Regular checks of clients against domestic and international watchlists.
• Ensuring Proper Record-Keeping: Maintaining detailed and accurate records of client information and transactions in compliance with AML/CFT regulations.

 

Common Non-bank Deposit Takers’ AML/CFT Issues

The following list is not exhaustive:

During Customer Onboarding

• Inadequate Identity Verification: Failure to thoroughly verify customer identity, increasing the risk of identity fraud.
• Insufficient Risk Profile Assessment: Inability to accurately assess a customer's risk profile, including inadequate analysis of the source of funds.
• Over-reliance on Outdated Information: Relying on outdated or insufficient documentation, leading to non-compliance with KYC norms.

 

After Customer Onboarding

• Ineffective Transaction Monitoring: Inadequate monitoring of transactions, leading to missed detection of suspicious activities.
• Outdated Customer Information: Failure to regularly update customer information and risk profiles, resulting in obsolete risk assessments.
• Non-Detection of Behavioural Changes: Lack of detection mechanisms for changes in customer behaviour or transaction patterns that may indicate money laundering or terrorist financing

 

 

Common NBDT Fraud Risks

The following NBDT fraud categories are not exhaustive:

• NBDTs and Identity Fraud: Fraudsters can attempt to use stolen or falsified identities to open deposit accounts, facilitating unauthorised transactions or the placement of illicit funds.
• NBDTs and Transaction Fraud: Fraud involving manipulated or fabricated deposit records, withdrawal requests, or documentation can be used to legitimise illicit funds or divert funds improperly.
• NBDTs and Insider Fraud: Employees may exploit their access to deposit systems for unauthorised transactions, diversion of customer deposits, or tampering with account details for personal gain.
• NBDTs and Phishing Fraud: Cybercriminals are able to target deposit account holders through phishing schemes, stealing credentials to gain unauthorised access and manipulate deposits or withdrawals.
• NBDTs and Technology Fraud: Exploitation of digital deposit platforms, including hacking, unauthorised access, or data manipulation, can compromise customer accounts or misappropriate funds.
• NBDTs and Cross-Border Deposit Fraud: International deposit systems may be misused to layer funds through multiple jurisdictions, obscuring the source or ownership of deposited funds.
• NBDTs and Deposit Structuring Fraud: Deposits can be structured below reporting thresholds to evade detection, often used in layering money laundering schemes.
• NBDTs and Third-Party Deposit Fraud: Intermediaries or third parties can be used to obscure the true depositor or beneficiary, complicating efforts to trace the origin of funds.
• NBDTs and Account Takeover Fraud: Unauthorised individuals gain control over legitimate customer accounts through various means, facilitating unauthorised transactions and fund manipulation.

 

 

Common AML/CTF Red Flags for NBDTs

The Financial Action Task Force (FATF) and various national AML/CTF supervisors outline the following ML/TF red flags for non-bank Deposit Takers. This is not an exhaustive list:

• Unusual Transaction Patterns: Transactions that significantly deviate from the customer’s normal activity, such as sudden large deposits or withdrawals without a clear business or personal rationale.
• Use of Third Parties Without Clear Justification: Customers making or receiving payments through third parties without a legitimate business or personal explanation.
• Disproportionate Transactions: Financial activities, such as deposits or withdrawals, that are disproportionate to the customer’s stated business or income levels.
• Involvement in High-Risk Jurisdiction Transactions: Frequent or high-value transactions involving countries with weak AML/CFT measures, high corruption levels, or known for organised crime.
• Rapid Succession of Financial Activities: Multiple high-value deposits or withdrawals conducted within short timeframes, inconsistent with normal account behaviour.
• Frequent Early Termination of Fixed Deposits: Clients repeatedly withdrawing fixed-term deposits prematurely, potentially as a method to layer illicit funds.
• Accounts Used as Pass-Through for Funds: Accounts receiving and immediately transferring funds without retaining balances, suggesting layering activities.
• Unclear Source of Funds or Wealth: Customers unable to provide sufficient documentation or credible explanation for the origin of their deposits.
• Transactions Involving Unregulated Financial Institutions: Engaging with intermediaries or entities in regions where financial institutions lack proper oversight or AML controls.
• Structuring of Deposits to Avoid Reporting Thresholds: Clients making multiple deposits just below the threshold requiring enhanced due diligence or reporting.