When compliance becomes a problem: SEPBLAC’s warning about de-risking

In the financial sector, there are legitimate interests that coexist but aren’t always easy to balance. On the one hand, entities operating in the system are subject to demanding regulatory and risk management obligations, which require them to implement increasingly comprehensive controls. On the other hand, individuals and organisations need standardised access to the financial system to operate with third parties and carry out their economic activities.

In 2022, the European Banking Authority (EBA) warned of a worrying trend: in their attempt to reduce the risks of money laundering, some institutions were choosing to reject or terminate relationships with certain customers or groups considered to be at greater risk. This phenomenon, which dispenses with individualised analysis and is based on generalised decisions by customer categories, is known as de-risking.

The Spanish Anti-Money Laundering Supervisory Authority (SEPBLAC) has described this phenomenon as an unintended consequence of an “exaggerated and partial application” of anti-money laundering and counter-terrorist financing (AML/CFT) regulations. Its main effect is the financial exclusion of certain groups, whose access to basic financial services is restricted or even blocked.

With the aim of addressing this situation, on 5 March SEPBLAC published a Guide to Good Practice aimed at minimising the phenomenon of de-risking in the Spanish financial sector and mitigating its effects.