The MFSA’s “Survey on Emerging Technologies and Financial Terrorism (FT) Risks” examines how firms view emerging technologies in financial crime prevention. Whilst 64% of respondents believe these technologies won’t increase FT risks, concerns were raised about system vulnerabilities and AI limitations.
Firms must integrate EU and national risk assessments into their Business Risk Assessments (BRA) and Customer Acceptance Policies (CAP), addressing high-risk clients. The adoption of advanced technology for FT risk management is uneven, with 10% of CASPs and 73% of E-Money firms using such tools.
Sanctions screening is often outsourced, with 92% using third-party providers, though 10% still rely on manual checks. Transaction monitoring methods vary, with 14% relying on manual checks, 68% using hybrid systems, and 18% fully automating.
The MFSA stresses that compliance remains the firm’s responsibility, even when outsourcing. The survey highlights gaps in CFT and TFS compliance, particularly in risk assessments, over-reliance on third-party systems, and insufficient staff training. The MFSA encourages entities to use this report as a tool to enhance governance, ensuring their compliance measures keep pace with evolving risks.
