FIC, BoG To Strengthen AML/CFT Measures

The Financial Intelligence Centre (FIC) and Bank of Ghana (BoG), in collaboration with fintech industry players, are aiming to introduce a locally-based sanction list in an effort to fortify the financial technology (fintech) landscape and curb financial crime.

The initiative aims to align the country’s fintech ecosystem with global standards in Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) measures.

The need for this development became apparent during the inaugural FIC Fintech Workshop. Clarence Blay, Assistant Director-FinTech and Innovation, Bank of Ghana, spoke passionately about the importance of this new approach.

He emphasised the role of existing global sanction lists – like the Office of Foreign Assets Control (OFAC) – in enhancing the country’s fintech ecosystem.

“As much as the OFAC and international sanction list are being used here and they’re helping us to build a strong ecosystem, we should also begin to think about developing a local list based on our own experience to complement what is happening globally. This is going to reinforce the fintech industry and further enhance trust in the ecosystem; and also signal that our commitment is not only in words but also in continuous evolution of the space in the right direction – so that we can continue to impact on people’s lives by using emerging technologies,” Mr. Blay stated.

The OFAC publishes lists that identify individuals and companies connected to targetted countries, and it includes individuals, groups and entities involved in various illicit activities. These sanctions serve diplomatic, economic and trade regulations against terrorism, drug trafficking and weapons proliferation.

Mr. Blay’s statements underscore the limitations of relying solely on international lists, as they may not comprehensively cover all the risks within Ghana’s fintech landscape. He noted that this gap could result in a failure to identify bad actors operating in Ghana who are not on those lists.

Furthermore, Mr. Blay highlighted collaborative efforts of the Bank of Ghana and Financial Intelligence Centre in fostering financial inclusion within the country’s fintech ecosystem. He recognised the vital role of fintech in this initiative by noting: “the Bank of Ghana and FIC are working to establish a trusted fintech ecosystem”.

He further emphasised the importance of continuous engagement with stakeholders to proactively address risks in AML/CFT.

Upcoming AML/CFT assessments

The domestic fintech industry is proactively stepping up its efforts against financial crimes, particularly in anticipation of upcoming assessments related to anti-money laundering and counter-terrorism financing. Kwaku Duah, Chief Executive Officer-Financial Intelligence Centre, disclosed significant initiatives in the pipeline – including a new National Risk Assessment (NRA) scheduled for 2024 and the country’s 3rd Round of AML/CFT Mutual Evaluation starting in the latter half of 2025.

During the FIC Fintech Workshop, Mr. Duah issued a compelling call to action; urging fintech companies to prioritise compliance with AML/CFT regulations.

He underscored the critical role of fintech in promoting financial inclusion and digital innovation, emphasising that fintech will have significant focus during upcoming assessments.

Ghana’s fintech sector has witnessed remarkable growth, with over 46 licenced institutions operating across six primary categories under the Fintech and Innovation Office. These institutions have harnessed the widespread mobile penetration to revolutionise financial services, contributing to a significant increase in the value of mobile money transactions – which soared from GH¢87.1 billion in August 2022 to GH¢ 161.8billion in August 2023.

However, this surge in fintech growth has also attracted the attention of criminals seeking to exploit these innovative platforms for financial crimes. The Bank of Ghana’s 2022 fraud report revealed that payment service providers experienced losses totalling GH¢27million due to fraud, emphasising the need for robust compliance monitoring solutions.

Strong AML and CFT measures are crucial for fintech companies to safeguard users and uphold the financial system’s integrity. Mr. Blay acknowledged the growing interest from investors in Ghana’s fintech sector due to its robust governance and AML/CFT regime, which has significantly driven financial inclusion.

As the nation prepares for the 3rd Round of AML/CFT Mutual Evaluation in the latter half of 2025, Mr. Blay expressed confidence for measures now in place to address previous challenges. He noted that completing the national ID project has removed uncertainty surrounding individuals’ identification and the integrity of their database, further solidifying Ghana’s commitment to evolving its fintech ecosystem in the right direction.