Financial Action Task Force (FATF) is a global body which multiple countries are members of. They think of how to address and limit problems like laundering money from drugs or weapons or how to limit bribery of politicians. So not to allow terrorists to gain resources and to protect us citizens. FATF makes regulatory recommendations in these areas that can be checked online. They constitute a key legal determinant for many legislators in various countries, as well as for the fintech industry.
“While developing your Customer Onboarding you need to adjust to the local ecosystem. What is available, what is possible and how you can do it.“
These recommendations are implemented in the Local Law layer below. What you need to know about your customers, what you need to do on the Due Diligence processes before you allow them to use your FinTech, for example to send Money, send Cryptos or buy some Loans or properties or Shares in properties. In Europe we have anti-money laundering directives. There are six of them and the sixth is the current one.
Polish, Dutch or German law may have approached the implementation of these recommendations in a slightly different way. So while developing your Customer Onboarding you need to adjust to the local ecosystem. What is available, what is possible and how you can do it.
Then the last layer at the bottom – Interpretation and Risk Tolerance of the entity itself. Banks, FinTechs or Financial Service Institutions have some risk tolerance and means to address it. So for example, Poland took quite a lot of migrants in recent years, something around almost three million. Mostly from Ukraine and Belarus. Major Polish banks decided to allow opening of bank accounts to these people. Of course, then the process is a bit different. It is probably not fully online. They do need to visit a branch or provide some additional documents like national identification number before opening a bank account with these banks. Some other financial institutions or FinTechs may decide not to serve people or entities which they do not feel comfortable serving.