Data Sharing, AML/CFT & Data Privacy: 2018, Together at Last?

Happy and healthy 2018 to all!

In this series of blog posts, I will discuss FATF’s November 2017 Guidance on Private Sector Information Sharing.  I am happy to say that the Guidance addresses many of the points I noted in my 2016 SWIFT Institute paper on AML/CTF and data privacy (e.g. cross-border data protection law, how confidentiality can forbid group sharing).

The FATF Guidance is a welcome development and seems to be part of a shift in thinking towards more favorable attitudes regarding data governance among AML/CFT professionals that I have personally noted in the past year. This is probably due to a host of factors including the EU’s General Data Protection Regulation (GDPR) constantly being in the headlines, the rise of cooperative public-private groups such as the UK’s Joint Money Laundering Intelligence Taskforce (JMLIT) and US’s FinCEN Exchange, Brexit, and developments in Fintech.

Building off its 2016 efforts, this FATF Guidance puts information sharing on the map in committing its governments to implement agendas to meet these goals.  The Guidance tells the private sector that states consider data sharing an internal and group priority.  Hopefully, it will provide financial institutions with enough confidence to contribute to forming the standards necessary so data sharing (public-private and private-private) can effectively balance market and national security interests.  FATF emphasizes this throughout the text, noting that putting the guidelines into practice requires public and private views and expertise.  Notably, FATF adds data privacy authorities to the Guidance’s intended audience alongside governments and financial institutions, thereby recognizing the importance of these views to the goal.

However, as is typical of any international group’s stance on a globally complicated issue with conditions that change according to jurisdiction, FATF guidance can only provide guideposts – it does not, and cannot, furnish the detailed governance and operational processes that regulators and financial institutions need.  This is not a criticism, but a reminder of the role and limitations of these Guidances and how much work there is yet to be done by national authorities and the private sector.*

FATF confirmed the widely-held belief that information sharing is essential to a “well-functioning AML/CFT framework.” In forthcoming posts, I will expand on three thematic streams within the Guidance;

  1. Data protection and privacy and AML/CFT are not mutually exclusive
  2. Financial institutions must share data internally and across the group
  3. Effective data sharing is only possible with public-private and private-private cooperation. (Recognizing the sometime cyclical cycle that public-private groups are “source as well as target of information flow.”)

All while noting that two conditions pervade all of the above;

  • Siloed views are not effective
  • Technology and governance are intertwined

I am looking forward to getting on the blog wagon again and seeing how the data sharing regime develops.  A thank you to everyone who has been supportive of my work on this topic over the years. Keep engaging – there’s more to come in 2018.


*Having said this, I hope the Wolfsberg Group follows suit and completes its 2014 guidance on AML/CFT and data privacy.


**This blog represents my personal opinions and does not represent LexisNexis Risk Solutions.  My research is my personal intellectual property and has been in no way influenced by any member of the financial services community or by government officials.