An “enormous” $750 billion (€647 billion) in dirty money is being washed through Europe’s financial system every year, a Dublin payments conference has heard.
Former Central Bank deputy governor Derville Rowland, who now sits on the board of the European Union’s new Anti-Money Laundering Authority (AMLA), said technology and innovation is being adapted and used by criminals at an alarming rate.
Crime as a service, where cybercriminals rent out their hacking skills, is a “phenomenon”, she told the national payments conference hosted by BPFI (Banking and Payments Federation Ireland).
“We see, in some countries, whole villages go to work everyday in the business of online crime,” she said, noting that drug trafficking, human trafficking and fraud were generating large amounts of money that was laundered.
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According to one estimate, Europe represents nearly a quarter of the total flow of illicit funds globally.
Rowland said AMLA’s focus was on detection and disruption.
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Under new EU money-laundering rules, driven by AMLA and coming into force next year, businesses selling high-value goods will no longer be able to accept more than €10,000 in cash from a single customer.
The rules are part of an EU-wide crackdown on the use of cash payments and part of a tighter oversight of cryptocurrency transactions.
Rowland called on business leaders to get their company boards ready for the “step-up in standards”.
“Your business-wide risk assessment, the flags you put into your system, the oversight, the monitoring of effectiveness, will make this work well . . . don’t have them (boards) surprised that there’s a step-up coming,” she said.
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The conference also heard about the “imminent launch” of instant-payments service Zippay across the three Irish pillar banks.
AIB, Bank of Ireland and PTSB plan to launch the service later this year, challenging Revolut’s dominance in the instant-payments market.
“The imminent launch of Zippay here in Ireland is an exciting development in the sector that will further increase user adoption of instant payments,” said Robert Troy, Minister of State for Finance.
“Similar initiatives across the EU such as Bizum in Spain and Blik in Poland have been hugely successful and there is an opportunity for Zippay to achieve equivalent success in the Irish market."
The availability of instant credit transfers will drive efficiency gains in settlement while speeding up the adoption of open banking payment-initiation services, he said.
“This enables point-of-sale payments to flow directly from consumers’ bank accounts to merchants’ bank accounts,” said Troy. “It has been a rapid shift and Irish enterprise has embraced it."
Bank of Ireland said an announcement on Zippay will be coming shortly from the three Irish banks. “We are very excited about the functionality this will give to our customers,” a spokesperson said.
Troy said the increased adoption of digital-payment methods has unfortunately coincided with an increase in the number and value of fraudulent transactions.
“The efficiency gains from digital-payment adoption must be balanced against associated risks, including payment fraud,” he said.
