Understanding Bank De-Risking and its Effects on Financial Inclusion

An exploratory study

Publication date: 18 November 2015
Author: Tracey Durner and Liat Shetret

‘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, non-profit organizations, correspondent banks and foreign embassies.

This report explores the linkages between bank de-risking and the ascendance of the risk-based approach to anti-money laundering and countering the financing of terrorism (AML/CFT). It presents a nuanced examination of the driving factors and influences behind de-risking, and its potential impact on financial inclusion for vulnerable communities. The report includes case studies from other sectors facing financial access challenges, and provides actionable recommendations for key stakeholders.

This joint agency report was led by the Global Center on Cooperative Security.