DNB: Volksbank has too little insight into possible criminal activities of customers

This article was last updated on August 30, 2023

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Insufficient Customer Risk Analysis

De Volksbank lacks a clear system that can be used to determine whether account holders are engaged in criminal activities. For example, the state bank does not sufficiently check whether customers misuse crypto coins to launder money. It is also not clear internally at which risks the alarm bells should go off.

Reprimand from DNB

Earlier this month, it was already known that De Nederlandsche Bank (DNB) had reprimanded de Volksbank for inadequate anti-money laundering rules. DNB announced the details today.

Systematic Integrity Risk Analysis

Everything revolves around a kind of framework in which the parent company of SNS, ASN, Regiobank, and BLG Wonen must notice the risks of customers, a Systematic Integrity Risk Analysis. This must state what kind of customers the bank wants to have and how they deal with this.

Lack of In-Depth Analysis

This analysis is mandatory for customers who invest in cryptocurrencies or transfer money to high-risk countries. However, according to DNB, “an in-depth analysis is lacking to get a good picture of customers who may pose an increased risk”.

Inadequate Customer Analysis

In addition, de Volksbank does not have a clear picture of exactly which country customers are in, which products and services they purchase, and where their money comes from and goes to. According to DNB, that customer analysis is “insufficiently thorough”.

Offence

The documents state that DNB received a signal in June last year that de Volksbank was not complying with the Money Laundering and Terrorist Financing (Prevention) Act (Wwft) due to inadequate customer control. After an investigation, the bank was told in March that, according to DNB, the law had been violated. In June, an official slap on the wrist, a so-called instruction, was given.

It is remarkable that de Volksbank asked DNB not to disclose the designation. After this request was rejected by DNB, the bank itself announced the designation this month when it published its half-yearly figures.

Restoration Work

De Volksbank ultimately did not object to the designation. The bank’s CEO, Martijn Gribnau, acknowledged the shortcomings and promised “to make every effort to rectify this”.

DNB has set a deadline of April 1 next year for de Volksbank to address the issues. Only then will it be considered whether de Volksbank will also be fined.

Not only de Volksbank, but also the other three major banks (ING, ABN Amro, and Rabobank) have problems preventing money laundering. For de Volksbank, however, the reprimand is extra sensitive for the government because the bank is fully state-owned.

ECB Fine

Today, the European Central Bank (ECB) announced that de Volksbank has been fined for inadequate control of transfers to regional banks in Switzerland, so-called cantonal banks. A fine of almost 4.5 million euros has been imposed for this.

De Volksbank previously reported the violation and had already made a reservation for a fine. The bank said it has already paid it to the ECB.