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14 June 2022 Supervision
 Financial District Rotterdam

Financial institutions often serve many different customers in many different sectors, including customers in sectors with higher inherent integrity risks. The sector in which a customer operates is one of the factors that a financial institution must take into account when assessing the individual customer's risk profile.

In our annual integrity risk survey (IRAP), we ask financial institutions to specify the number of customers in various sectors and the extent to which services are provided to these customers. These are sectors that are generally known to be potentially more vulnerable to integrity risks, such as the commercial real estate sector, trust offices, crypto exchange platforms and crypto wallet providers, and the gambling sector, and which may therefore carry a higher integrity risk profile. We use this information as one of the variables to determine a financial institution’s inherent risk profile.

Customer-specific, not generic

Market parties have told us they find it difficult to interpret the survey questions about this list of sectors. The fact that a sector is mentioned in the survey does not mean we expect that all customers in that sector are by definition assigned a high risk profile, nor does it mean that customers that are active in sectors other than those listed cannot by definition have a higher integrity risk. The sector in which a customer operates is only one of the factors the institution must consider in determining the customer risk classification (As part of the customer due diligence as referred to in Section 3(2) of the Wwft). This risk classification is customer-specific and therefore does not apply generically to all customers in a particular sector.

Identifying and managing risks

Any decision to enter into or continue a business relationship with a specific (new or existing) customer is up to the institution itself, and must be based in part on the risk appetite the institution has set for itself and its ability to manage identified integrity risks. As supervisor of compliance with the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme – Wwft), we expect institutions to adequately manage identified customer-specific risks.

Sector(s)

  • Banks
  • Crypto service providers
  • Insurers
  • Investment firms
  • Pension funds
  • Trust offices