Citywire - For Professional Investors

Register to get unlimited access to all of Citywire’s fund manager database. Registration is free and only takes a minute.

Credit Suisse responds to AML probe in Switzerland

Credit Suisse responds to AML probe in Switzerland

Credit Suisse is ramping up its compliance operations following a probe into its anti-money laundering (AML) due diligence led by Swiss watchdog Finma.

This month Finma concluded the investigations of Credit Suisse’s clients who were allegedly involved in corruption at Fifa, the international governing body of association football, Brazilian oil major Petrobras, and Venezuela's state oil firm Petróleos de Venezuela (Pdvsa).

The investigation covered cases between 2006 and 2016. Credit Suisse also undertook independent reviews and self-reported shortcomings to Finma in 2017.

However, the Swiss wealth manager, which handles CHF 206 billion ($214 billion) in Asia, was neither fined nor ordered to disgorge profits.

In a statement, Credit Suisse said it intends to establish a compliance, conduct and culture board committee to consolidate ongoing efforts to improve its AML framework. 

What's more, the bank has increased its global compliance headcount by 42% by hiring 800 compliance specialists in the last three years.

It has also separated its legal and compliance functions, creating a group compliance and regulatory affairs function that reports to CEO Tidjane Thiam.

Additionally, Credit Suisse said it has made over 10,000 improvements to its banking controls, and is investing in technology and data analytics.

This includes three data labs that prevent and detect risks, and the recruitment of 40 data scientists within compliance.

The Swiss lender has been developing a ‘single client view’ program since 2015 that gives its compliance teams an integrated view into all the client’s relationships with the bank instantly and automatically.

However, Finma said that the single client view program has to be made available to all other relevant departments by the end of 2019.

Finma will also appoint an independent third party to review the implementation of the bank’s measures to improve governance, organisation and risk management in its wealth management business.

The investigation

The probe revealed that during the 10 years in question, Credit Suisse repeatedly failed to comply with due diligence obligations relating to its Fifa, Petrobras and Pdvsa relationships.

The shortcomings related to identifying clients, determining the beneficial owner, categorising risky business relationships, performing plausibility checks, and ensuring adequate documentation.

Finma said Credit Suisse repeatedly failed to contain and monitor risks from a politically exposed client and the responsible relationship manager, who had significant assets under management.

‘Instead of disciplining the client manager promptly and proportionately, the bank rewarded him with high payments and positive employee assessments. The supervision of the relationship manager was inadequate due to this special status,’ Finma wrote.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.