Understanding Bank De-risking and Its Effects on Financial Inclusion

Author : Tracey Durner and Liat Shetret
Date : November 2015

“De-risking” refers to financial institutions closing the accounts of clients perceived as high risk for money laundering or terrorist financing abuse, namely money service businesses, nonprofit organizations, correspondent banks, and foreign embassies.

This report explores the links between bank de-risking and the ascendance of anti-money laundering and countering the financing of terrorism policy. It presents a nuanced overview of the driving factors and influences behind de-risking and its potential impact on financial inclusion, particularly for vulnerable communities. The report includes case studies highlighting innovative approaches to, and lessons learned from, addressing financial access challenges across six different sectors. It concludes with recommendations to better address de-risking challenges for banks, regulators, and bank clients experienced in or at risk of account closures.

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