Canada’s anti-money laundering watchdog is looking at ways of reducing the regulatory burden facing smaller financial institutions, the agency’s new director and CEO said on Thursday.
In her first public address since being appointed to the role last February, Nada Semaan said the Financial Transactions and Reports Analysis Centre of Canada, or Fintrac, is looking for ways to measure the burden that companies face in meeting their anti-money laundering obligations.
“We are talking to different entities to find out what is the burden and how can we make it better,” Ms. Semaan told the Parliamentary Standing Committee on Finance.
The cost of implementing a compliance regime – which includes appointing a compliance officer, keeping detailed client records and regularly reporting suspicious transactions to Fintrac – can be steep, particularly for smaller institutions.
Dan Albas, a member of the standing committee and a Member of Parliament in British Columbia, said many industries find the requirements to be onerous, and that he has spoken to one small credit union that says anti-money laundering compliance makes up a “very large” proportion of its costs.
Ms. Semaan said Fintrac is committed to examining the issue and finding ways to run its programs more efficiently.
“We do have to balance the requirement to get the data with the administrative burden,” Ms. Semaan said.
The agency also has to strike the right balance between gathering the data that it needs to identify financial crime and infringing upon personal privacy, she added.
The Canadian Bankers Association has requested the ability to share information more freely between banks in the fight against financial crime, but Ms. Semaan said that need has to be balanced against the need to protect the privacy of Canadians.
“I think there is a sweet spot that we need to find,” Ms. Semaan said.
Ms. Semaan was also asked about blockchain technology, which underpins cryptocurrencies such as bitcoin that have been flagged as a potential vehicle for money launderers.
Ms. Semaan called blockchain a “two-sided coin.”
On one hand, the technology – which is based around a decentralized, distributed digital ledger – could be an asset for investigators looking to solve financial crimes.
“But we also are very aware that some of this technology allows bad actors to abuse our system,” Ms. Semaan added.