Specialised Solutions for P2P AML/CFT Compliance Management

We offer a comprehensive set of anti-money laundering (AML), counter-terrorist financing (CFT), and fraud prevention solutions for P2P platforms’ anti-money laundering compliance that are tailored to applicable AML/CTF (aka CTF) laws, regulations, AML/CTF supervisors' guidance for P2P lending services and platforms, sector-specific red flags and indicators, to help your business meet applicable obligations that cover P2P 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 P2P lending AML requirements in a commercially oriented and goal-focused manner, providing effective AML/CTF support for all aspects of P2P platforms’ 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 P2P platforms
• Any peer-to-peer lending fraud prevention obligations or expectations your business may be subject to
• Any related compliance obligations, including, but not limited to, P2P platforms’ 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 P2P platforms
• 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 P2P platforms' anti-money laundering, counter-terrorist financing and sanctions compliance, as well as financial crimes prevention

 

 

What Jurisdictions Do Our P2P Lending AML Solutions Cover?

• P2P AML solutions in Australia: P2P platforms’ AML anti-money laundering obligations in Australia are outlined under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, with supervision typically under AUSTRAC (Australian Transaction Reports and Analysis Centre) and professional bodies like the Australian Securities and Investments Commission (ASIC).
• P2P AML solutions in the United States: P2P platforms’ AML anti-money laundering compliance in the USA follows the Bank Secrecy Act (BSA), supervised by the Financial Crimes Enforcement Network (FinCEN).
• P2P AML solutions in the United Kingdom: P2P lending AML requirements in the UK are outlined under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, last amended in 2020, supervised by the Financial Conduct Authority (FCA).
• P2P AML solutions in the European Union: P2P platforms’ AML anti-money laundering compliance across the European Union follows the Sixth Anti-Money Laundering Directive (AMLD6), supervised by the relevant national competent authorities in each member state.
• P2P AML solutions in Singapore: P2P platforms’ AML anti-money laundering obligations in Singapore are stipulated under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act and the Monetary Authority of Singapore (MAS) AML/CFT Notices and Guidelines, with oversight from the Monetary Authority of Singapore (MAS).
• P2P AML solutions in New Zealand: P2P lending AML requirements in New Zealand are regulated under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, with oversight from the Financial Markets Authority (FMA).
• P2P AML solutions in the British Virgin Islands (BVI): P2P platforms’ AML anti-money laundering obligations in the BVI are outlined under the BVI Anti-Money Laundering Regulations 2008, revised in 2018, with supervision typically under the BVI Financial Services Commission (BVIFSC).
• P2P AML solutions in the Cayman Islands: P2P platforms’ AML anti-money laundering obligations in the Cayman Islands are governed by the Cayman Islands Money Laundering Regulations, 2019, with oversight from the Cayman Islands Monetary Authority (CIMA).
• P2P AML solutions in Malta: P2P platforms’ AML obligations in Malta are regulated by the Prevention of Money Laundering Act and the Prevention of Money Laundering and Funding of Terrorism Regulations, as amended up to 2020, with oversight by the Malta Financial Services Authority (MFSA).
• Offshore P2P lending platforms that are subject to P2P lending AML requirements.

 

 

Which Types of Services and Platforms Do We Support?

Focusing on money laundering (ML), terrorist financing mitigation (TF), and fraud prevention, our P2P Lending AML solutions cover the following types of P2P lending service providers and institutions that are deemed to be AML/CTF designated service providers (aka “reporting entities”):

• P2P Lending Platforms
• Peer-to-Peer Investment Platforms
• Crowdfunding Platforms
• Online Loan Marketplaces
• Microfinance Institutions
• Digital Lending Services
• Marketplace Lending Providers
• Community Lending Platforms
• Peer-to-Peer Lending Service Providers
• Other types of services and platforms and services that are subject to P2P lending AML requirements and P2P lending AML requirements

 

P2P AML Advisory and Support

Our AML/CFT advisory services for P2P platforms include, but are not limited to, the following:

• Detailed AML/CTF compliance advice: Tailored to the P2P lending 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.
• Peer-to-peer lending 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 P2P platforms. Also, tailored to peer-to-peer lending fraud environment, risk management practices, and stakeholders' expectations and obligations (banks, regulators, insurers, shareholders, etc.).
• Banking relationships advice: Advising P2P lending providers 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 (complicated 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 P2P platforms 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 P2P 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 P2P platforms’ anti-money laundering compliance obligations and your specific situation.
• AML/CFT remediation advice: We help P2P platforms 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 P2P platforms’ 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 P2P 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 P2P lending 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 P2P lending AML requirements, AML regulations and guidance.
• Workshops on Emerging Trends and Red Flags: Advising on new AML trends, red flags, and typologies relevant to P2P 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 P2P platforms
• KYB analysis and ML/TF risk assessment application to specific clients, transactions and situations
• The P2P 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 P2P 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 cross-border P2P lending
• Other obligations related to the P2P lending AML requirements

• Practical Compliance Applications: Ensuring the practical application of training, focusing on real-world P2P money laundering, terrorist financing, and common peer-to-peer lending fraud scenarios, as well as specific challenges related to the P2P 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 P2P platforms and other businesses subject to AML/CFT regulations.

 

Comprehensive AML/CFT Managed Solution for P2P platforms

Our P2P 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 P2P platforms’ anti-money laundering obligations for your business.
• P2P platforms’ 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 robust 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 P2P lending 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 P2P lending AML requirements in a commercially efficient manner without making AML/CFT compliance a business hindering factor.
• Transaction Monitoring and Peer-to-peer Lending 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 P2P lending 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 P2P lending money laundering risks
• identifying areas for improvement

Our AML/CFT compliance reports cover:

• your ongoing compliance status in relation to P2P lending 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 P2P platforms.

• P2P AML and Externally Reportable Matters: Implementing effective external reporting procedures to help you comply with P2P platforms’ 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 P2P lending AML requirements for statutory reporting.
• Peer-to-peer Lending 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 P2P Platforms’ Anti-Money Laundering Compliance

We offer a range of KYB solutions to help you effectively comply with the P2P lending 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 P2P AML/CFT Compliance Management

We develop, enhance, and implement a set of core policies, manuals, frameworks, and procedures for effective P2P AML/CFT compliance management, including the following:

• P2P AML/CFT Framework Development: Covering specific P2P lending 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 P2P lending 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 P2P platforms 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 P2P platforms’ 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 P2P 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

• P2P AML/CTF Procedures for Effective AML Compliance: Effective procedures are another core pillar of P2P 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 P2P lending 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 P2P platforms’ anti-money laundering compliance. We help you develop, map, and assess your internal ML/TF controls and improve their effectiveness to ensure compliance with P2P lending 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 P2P 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, P2P 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, peer-to-peer lending 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 P2P platforms’ AML solutions include needs assessment and assistance in selecting and integrating appropriate AML technologies for efficient P2P platforms’ 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
• Ongoing Due Diligence Obligations Management
• Internal AML/CFT Reporting
• P2P Platforms’ 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
• P2P Platforms’ AML AML/CFT obligations for Record-Keeping
• Peer-to-Peer Lending Fraud Prevention
• Transaction Monitoring and Surveillance: Including transaction monitoring tools to automate detection and response to P2P money laundering and terrorist financing red flags
• Effective CRM for Handling P2P Lending AML Requirements

 

 

P2P 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 P2P platforms’ 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 local AML/CTF obligations and P2P lending AML requirements. 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 P2P 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 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 P2P platforms 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 P2P lending 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
• P2P platforms’ 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 P2P platforms’ 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 P2P 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.

 

 

Peer-to-Peer Lending Fraud Prevention Solutions

The P2P platforms’ anti-money laundering control environment is closely related to prevention of financial crime in general, and fraud prevention in particular. Peer-to-peer lending 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 Peer-to-peer lending 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 P2P lending 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.

 

Peer-to-peer lending 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 P2P Platforms

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 P2P lending 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 P2P platforms, 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 P2P Platforms 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
• 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 P2P platforms, including preparation, licensing process management, regulator liaison, and post-licensing support in:

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

 

 

Common Money Laundering Risks for P2P Platforms

P2P 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 P2P platforms represent only a sample and are not exhaustive.

 

Product-Related Risks and Peer-to-peer Platforms’ AML Compliance

Some of the product-related ML/TF risks relevant to P2P platforms’ anti-money laundering compliance include:

• Insufficient Oversight of Third-Party Deposits and Withdrawals: Failure to monitor or control third-party involvement in lending and repayment transactions.
• Inadequate Transaction Monitoring for Fund Disbursements: Lack of mechanisms to trace the flow of funds from lenders to borrowers.
• Absence of ML/TF Risk Classification for Borrowing Projects: Failure to categorise borrowing projects based on their ML/TF risk levels.
• Insufficient Due Diligence on Borrowing Purposes: Lack of processes to verify the legitimacy and purpose of borrowing requests.
• Absence of Controls for Collateral-Based Loans: Lack of mechanisms to assess the legitimacy of collateral or loan repayments (relevant to the P2P lending platforms).
• Inadequate Verification of Investment Origins: Failure to verify the sources of funds invested into projects or securities exposes platforms to risks of laundering illicit money, which can later be liquidated as legitimate returns (relevant to the peer-to-peer investment platforms).
• Lack of Monitoring for Structured Small Loans: Insufficient detection measures for small loans disbursed across multiple accounts or entities (relevant to the microfinance institutions).
• Inadequate Verification for Digital Wallets: Weak controls to ensure the legitimacy of digital wallets used for loan disbursement and repayment (relevant to the digital lending services).
• Insufficient Transparency in Syndicated Loans: Inadequate tracing of pooled loans across multiple investors and borrowers may facilitate laundering through layered transactions (relevant to the marketplace lending providers).
• Weak Controls for Group Lending Models: Insufficient monitoring of pooled community funds (relevant to the community lending platforms).
• Emerging Risks in Cryptocurrency and DeFi Transactions: Lack of controls for cryptocurrency or decentralized finance transactions increases exposure to anonymous and cross-border ML/TF activities.

 

 

Jurisdictional Risks and Peer-to-peer Platforms’ AML Compliance

Some of the jurisdictional risks relevant to P2P money laundering prevention include:

• Inadequate Screening for Cross-Border Borrowing and Lending Transactions: Failure to identify and mitigate risks associated with cross-border activities involving jurisdictions with poor AML/CFT controls, high corruption levels, or weak enforcement mechanisms.
• Lack of Enhanced Due Diligence for High-Risk Jurisdictions: Insufficient due diligence processes for borrowers, lenders, or projects linked to sanctioned regions, conflict zones, or areas with significant terrorist financing activity.
• Failure to Address Risks in Multi-Jurisdictional Lending Structures: Weak controls to trace fund flows and identify beneficial owners in lending projects spanning multiple countries with inconsistent regulatory standards.
• Insufficient Processes for Jurisdictional Risk Reassessment: Failure to update and reassess jurisdictional risks when clients or transactions shift to regions with emerging ML/TF vulnerabilities, such as jurisdictions newly identified for weak AML/CFT frameworks.

 

Delivery Method Risks and Peer-to-peer Platforms’ AML Compliance

Some of the service delivery method-related ML/TF risks relevant to P2P platforms’ anti-money laundering compliance include:

• Insufficient Verification in Digital-Only Interactions: Weak or absent controls to verify customer identities in non-face-to-face onboarding processes, increasing exposure to fraudulent accounts and anonymous transactions.
• Lack of Oversight for Automated Payment Systems: Failure to monitor and control automated loan disbursements and repayments, especially when routed through unverified digital wallets or payment platforms.
• Inadequate Controls for Cross-Border Payment Gateways: Weak mechanisms to detect and assess risks in transactions processed through international payment gateways, exposing platforms to fund layering and jurisdictional vulnerabilities.
• Absence of Mechanisms for Document Verification in Peer Transactions: Insufficient measures to link uploaded documents to the actual identities of users, particularly in cases of third-party involvement in borrower-lender interactions.

Customer Type Risks and Peer-to-peer Platforms’ AML Compliance

Some of the customer type-related ML/TF risks relevant to P2P money laundering prevention include:

• Lack of Mechanisms to Detect High-Risk Clients Using Complex Structures: Absence of controls to identify and assess customers employing layered corporate entities or trusts, which can obscure beneficial ownership and facilitate fund misuse.
• Failure to Apply Risk-Based Screening for High-Risk Occupations and Industries: Insufficient due diligence measures for customers in industries prone to ML/TF risks, such as virtual assets, gambling, or cash-intensive businesses.
• Inadequate Ongoing Monitoring for Clients Exhibiting Risky Behaviours: Absence of systems to track sudden changes in client activity, such as frequent changes to loan purposes or unexpected spikes in transactions.
• Inadequate Identification of Vulnerable Groups at Risk of Money Mule Exploitation: Failure to implement controls to identify and assess customers from groups commonly exploited as money mules, such as financially distressed individuals or students.
• Risks Associated with Gatekeeper Professionals: Inadequate controls to monitor the activities of accountants, lawyers, or other professionals acting as intermediaries in transactions can obscure fund origins or facilitate illicit transfers through client trust accounts.

 

Institutional Risks and Peer-to-peer Platforms’ AML Compliance

Some of the institutional ML/TF risks relevant to P2P platforms’ anti-money laundering compliance include:

• Reliance on Outsourced AML Services Without Oversight: Platforms delegating AML/CFT processes to third-party agents or service providers without verifying whether their compliance standards match their AML/CFT program and procedures.
• Insufficient Screening of Crowdfunding and Other Partner Platforms: Failure to verify the AML/CFT measures of other platforms used for co-investments or funding.
• Weak Screening of Partner Platforms and Financial Institutions: Failure to assess the AML/CFT measures of partner platforms or financial institutions involved in loan disbursements and repayments.

 

 

 

Standard Anti-Money Laundering Requirements for P2P Platforms

Given the variety of P2P lending 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 Certain Non-Suspicious 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.
• 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 P2P lending services and P2P platforms.
• Independent AML/CFT Audits and P2P platforms: 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 Peer-to-peer Platforms’ AML/CFT Issues

This is not an exhaustive list and could include:

During Customer Onboarding

• Inadequate eKYC Processes: Failure to meet AML/CFT requirements for electronic verification of customer identities.
• Insufficient Linking of Documents to Customer Identities: Weak processes to verify that submitted documents correspond to the actual identities of customers.
• Lack of Staff Training on P2P AML Requirements: Insufficient staff awareness of P2P-specific AML obligations results in missteps during onboarding, including overlooking red flags or incomplete due diligence.
• Inadequate Due Diligence on Borrowing Projects: Platforms failing to assess the legitimacy of borrowing purposes or project details.
• Lack of Enhanced Due Diligence (EDD) for High-Risk Customers: Inadequate scrutiny for customers from high-risk jurisdictions.
• Inconsistent Risk Profiling of Borrowers and Lenders: Weak customer risk assessment frameworks result in misclassification of risk levels.

 

After Customer Onboarding

• Inadequate Systems for Detecting Suspicious Transactions: Platforms lacking alert systems and effective protocols to assess and investigate flagged transactions.
• Delayed or Missed Suspicious Transactions Reports (STR/SMR): Weak processes for identifying and escalating suspicious activities hinder timely reporting to authorities.
• Lack of Controls for Monitoring Instant and Cross-Border Payments: Insufficient mechanisms to track and evaluate high-risk payment methods such as crypto, instant payments, or cross-border.
• Failure to Refresh KYC for Long-Term Customers: Platforms neglecting to reassess customer risk profiles over time may miss emerging ML/TF risks.
• Inadequate Tracking of Changes in Investment Patterns: Unusual or inconsistent changes in lender or borrower behaviours may go undetected due to weak transaction monitoring systems.

 

 

Common P2P Scams and Fraud Risks

The following list of peer-to-peer lending fraud types is not exhaustive:

• P2P Lending and Identity Fraud: Fraudsters use stolen or falsified identities to create fake borrower or lender accounts, gain access to platform services or secure loans fraudulently.
• P2P Lending and Loan Fraud: Borrowers misrepresent financial information, fabricate project details, or provide counterfeit documentation to secure loans with no intention of repayment.
• P2P Lending and Insider Fraud: Platform employees misuse their access to manipulate loan applications, divert funds, or tamper with repayment records for personal gain.
• P2P Lending and Phishing Fraud: Phishing attacks target lenders or borrowers to steal sensitive information, enabling unauthorised account access and fraudulent transactions.
• P2P Lending and Transaction Fraud: Manipulated or falsified transaction records create the appearance of legitimate repayments or investments while diverting funds for unauthorised purposes.
• P2P Lending and Technology Fraud: Exploiting platform vulnerabilities, such as weak cybersecurity measures, to hack accounts, disrupt operations, or manipulate loan disbursement systems.
• P2P Lending and Collateral Fraud: Borrowers provide falsified or overvalued collateral to secure loans, leaving lenders at risk of significant financial losses.
• P2P Lending and Cross-Border Fraud: Use of international lending platforms to obscure fund origins or exploit jurisdictional gaps in regulatory oversight, facilitating laundering or fraud.
• P2P Lending and Ponzi Schemes: Fraudulent operators create fake investment opportunities, using funds from new investors to pay returns to earlier investors while siphoning off contributions.
• P2P Lending and Fake Borrower Syndicates: Groups of borrowers collude to apply for loans simultaneously, sharing the proceeds and evading repayment by exploiting platform monitoring gaps.
• P2P Lending and Digital Asset Fraud: Fraud involving cryptocurrency-based loans, including fake token offerings or unauthorised wallet access, to misappropriate or launder funds.

 

 

Common AML/CTF Red Flags for P2P Lending Services

The Financial Action Task Force (FATF) and various national AML/CTF supervisors outline the following ML/TF red flags for P2P lending providers. This is not an exhaustive list:

• Unverified or Inconsistent Customer Information: Borrowers or lenders providing incomplete, false, or conflicting identification details, particularly when attempting to remain anonymous or using multiple accounts.
• Rapid Loan Turnover: Borrowers taking out loans and repaying them unusually quickly without clear economic justification, raising concerns about layering funds.
• Transactions Involving High-Risk Jurisdictions: Loans or repayments involving parties from or through jurisdictions with poor AML/CFT controls, high corruption, or known links to terrorism or organized crime.
• Use of Third-Party Payments: Involvement of unrelated third parties in loan disbursements or repayments, which obscures the origin or destination of funds.
• Lack of Clear Funding Sources: Borrowers or lenders with sudden and unexplained influxes of funds, inconsistent with their declared profiles or financial histories.
• Multiple Accounts Sharing IP Addresses or Other Identifiers: The use of shared digital credentials by multiple accounts to apply for or repay loans, which could indicate "money mule" activity or fraud.
• Inconsistent Repayment Patterns: Borrowers making irregular or overly frequent repayments that do not align with their financial capacity or loan terms.
• Complex Loan Structures: Overly intricate or unusual loan agreements or syndication structures designed to obscure the true origin or purpose of funds.
• Suspicious Activity on Digital Wallets: Use of unverified or pseudonymous digital wallets for loan disbursements or repayments, increasing exposure to anonymous transactions.
• Repeated Loan Applications by Borrower Groups: Groups of borrowers repeatedly applying for loans under different accounts, suggesting coordinated activity to exploit the platform.