Financial institutions, including credit institutions, have to put in place and maintain policies and procedures to comply with their legal obligations. These include policies and procedures to identify and manage the risks to which they are exposed, for example the risk that they may be used for money laundering and terrorist financing (ML/TF) purposes or credit risk. Where a financial institution considers that it cannot effectively manage those risks, it may decide to restrict access to or withdraw from providing a particular financial product or service, or servicing a particular customer or category of customers. This is referred to as ‘de-risking’.

The ESAs’ Joint Risk Factors Guidelines (published in 2017 and currently being revised) indicated that a risk-based approach does not require financial institutions to terminate business relationships with entire categories of customers that they associate with higher ML/TF risk, as the risk associated with individual business relationships may vary, even within one category. 

The EBA has collected anecdotal evidence that across the EU:

• some respondent banks have had their Correspondent Banking Relationships (CBRs) terminated because of their risk profile. As a result, some have in turn closed customers’ accounts to mitigate these risks, while others have lost access to for e.g., dollar clearing;
• certain categories of customers or businesses that are associated with higher ML/TF risks, for e.g. NGOs or faith organisations, customers who are asylum seekers from high risk jurisdictions, or businesses operating in sectors associated with a higher incidence of corruption and other predicate offences have experienced difficulties in accessing banking services; 
• some segments of the financial sector (e.g. payment institutions and electronic money institutions) have seen their access to banking facilities restricted. 
• This Call for Input aims at identifying the scale of the issue and the challenges caused to a variety of interested parties as a result of de-risking at EU level. In particular, we need to understand why financial institutions choose to de-risk instead of managing the risks associated with certain sectors or customers. We also want to hear from groups affected by de-risking. Therefore, this Call for Input is of interest to stakeholders across the financial sector and its users (e.g. banks, payment institutions and electronic money institutions, NGOs, etc.).

The feedback gathered from this Call will feed into the EBA’s next Opinion on the risks of money laundering and terrorist financing affecting the Union's financial sector that the EBA is mandated to issue under Art. 6(5) of Directive (EU) 2015/849 that will be published in Q1, 2021. It may also inform other EBA policy outputs.

Submission of responses

To submit your answers, click on the ‘send your comments’ button and submit your responses by 11 September 2020. Please note that comments submitted after this deadline, or submitted via other means may not be processed.

Publication of responses

Please clearly indicate in the electronic form if you wish your comments to be disclosed or to be treated as confidential. A confidential response may be requested from us in accordance with the EBA’s rules on public access to documents. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by the EBA’s Board of Appeal and the European Ombudsman.

Data protection

The protection of individuals with regard to the processing of personal data by the EBA is based on Regulation (EU) 1725/2018 of the European Parliament and of the Council of 23 October 2018. Further information on data protection can be found under the Legal notice section of the EBA website.

Disclaimer

The questions asked in this call for input are preliminary and will not bind in any way the EBA in the future development of its legal instruments. They are aimed at eliciting discussion and gathering the stakeholders’ opinions at an early stage of the process.

The EBA invites respondents to answer the questions listed below. Please note that the first set of questions (1 to 5) target institutions that take decisions to de-risk or are considering taking decisions to de-risk, whereas the second set (5-11) target those affected by these decisions. In case a question is not relevant for you, please answer with "Non-Applicable" or "NA".

If you represent a financial institution that has taken decisions or is considering taking decisions to de-risk, please answer the following questions:

1. In which Member State is your institution established?

2. Please provide information on the type or nature of customers or categories of customers you have decided not to service and/or on the financial products you have withdrawn from providing.

Please provide quantitative data where possible in support of your response (e.g., how often this type of decisions are taken per calendar year, an estimate % this represents in the total number of your business relationships, etc.).

3. Which risk factors does your institution consider when assessing whether to withdraw from serving certain customers or categories of customers or from offering certain products? In your experience, is one risk factor more important than others? If so, which one?

4. What measures (such as offering alternative products, increasing the price for an existing product, or restricting the features of an existing product) has your institution taken to mitigate potential detriment arising from your de-risking decision?

5. Has your institution received any complaints from customers or prospective customers on matters related to de-risking? If so, how many and what were the top-two issues raised by these complainants?

If you or the institution you represent have been affected by de-risking, please answer the following questions:

6. In which Member State is the financial institution that decided not to have/withdraw business relationship with you established?

7. Which financial product have you been denied access to?

8. How did it affect you and what was the concrete impact of this decision?

Please provide quantitative data where possible in support of your response.

9. How was the decision not to have/withdraw a business relationship with you explained by the financial institution?

10. Were you given an opportunity to have this decision reviewed and if so, what was the process involved with what outcome? Please provide details.

11. Were you able to use alternative channels to access financial services? Please explain.