The Bangko Sentral has called on banks to follow stricter measures on the rising number of clients engaged in gambling and or online gaming business.
BSP Deputy Governor Chuchi Fonacier, in Memorandum No. M-?2018-002, said banks now have greater exposures to gaming-related clients, thus, the need to “ensure the soundness of their risk management policies and practices to manage risk exposures arising from the transactions of these customers.”
First of these rules is for the banks’ Board of Directors (BOD) to set the financial institutions’ risk appetite and to require an adequate reporting mechanism to update the Board on risk exposure for it to “make informed decisions and issue appropriate directives.”
Banks need to also conduct necessary due diligence on the customers “to ensure that they will not be used as channel for money laundering (ML)/terrorist financing (TF) activities.”
These measures include really understanding their customers’ business model to foresee any suspicious activities, transacting only to authorized or licensed gaming business, and verifying the identity of the businesses’ owners.
Banks are also required to have customer risk assessment that focuses on their client’s business operations and products, types of customers, the business distribution channel and jurisdictions where the gaming business operates.
Continued account and transaction monitoring are also required from the banks, the Memorandum said, as it pointed out that banks are expected to have their Money Laundering and Terrorist Financing Prevention Program.
- Published in Business