Money laundering part of 'complex' crime landscape

The government's Money Laundering Risk Assessment for the banking sector is one of five planned

An assessment of the money laundering risk facing the Isle of Man's banking sector was a reflection of the "complex" and rapidly evolving crime landscape, the home affairs minister has said.

The document found that the industry was at a "medium-high" risk of financial crime activity.

The assessment aimed to improve understanding of the risks and identified emerging threats, such as the misuse of crypto-currency along with other virtual assets, cyber crime and fraud.

Home Affairs Minister Jane Poole-Wilson said the rating was "what was expected" for the sector "given that we are operating as an international financial centre", and the island was "working hard" to keep pace.

Poole-Wilson said, although the banking sector had a lot of controls in place, it was recognised that the industry had to be "alert" to "new and emerging types of threat" such as automated payment systems.

Home Affairs Minister Jane Poole-Wilson said risk assessment results were "what was expected"

The report outlined that the banking sector held more than £40bn in deposits and processed nearly £80bn in annual payments.

The document proposes enhancing collaboration to reduce the risk of fraud and improving data systems to better understand financial flows.

The piece of work builds on the 2020 National Risk Assessment, and forms part of the broader programme of sector specific assessments being released later this year and early next year.

"Given the nature of our economy, I think we do have to recognise that we are likely to be exposed to financial crime, which is why it is so important that we conduct risk assessments, understand the risks and take effective measures," Poole-Wilson said.

However, she said the level of risk was not out of step with other neighbouring jurisdictions.

The assessment comes a year before Moneyval inspectors will assess and report on how the island deals with money laundering.

The government has said industry engagement will take place to make sure firms have an understanding of the risk assessments, with meetings and workshops set to be held to strengthen awareness and underline the need to use the findings to update policies.