Money Services Businesses (MSBs), Alternative Financial Service Providers (AFSPs), and Non-Bank Financial Institutions (NBFIs) face significant AML challenges when compared to conventional financial services providers. The foremost challenge is determining which AML legislation applies. Standards from domestic and international regulators have been inconsistent and unclear, particularly for emerging payment technologies, and AML legislation designed for MSBs/AFSPs/NBFIs is typically transaction based, not account-centric, so incompatible with the realities of many of these business types. Compared to Europe, Canadian legislation and guidance provides only vague information about money laundering risks and controls relevant to AFSPs. Notwithstanding, the perceived money laundering and non-compliance risk of MSBs is high, leading to potential enhanced regulatory scrutiny, and strained banking relationships.
Money Services Businesses (MSBs), Alternative Financial Service Providers (AFSPs), and Non-Bank Financial Institutions (NBFIs) face significant AML challenges when compared to conventional financial services providers. The foremost challenge is determining which AML legislation applies. Standards from domestic and international regulators have been inconsistent and unclear, particularly for emerging payment technologies, and AML legislation designed for MSBs/AFSPs/NBFIs is typically transaction based, not account-centric, so incompatible with the realities of many of these business types. Compared to Europe, Canadian legislation and guidance provides only vague information about money laundering risks and controls relevant to AFSPs. Notwithstanding, the perceived money laundering and non-compliance risk of MSBs is high, leading to potential enhanced regulatory scrutiny, and strained banking relationships.