Banking regulator poised to ramp up scrutiny of money laundering as risks rise
TORONTO — The head of Canada’s banking regulator says he’s ramping up scrutiny of money laundering in the financial sector as risks increase.
Peter Routledge, who leads the Office of the Superintendent of Financial Institutions, said regulators and banks are having to play catch-up on how criminals are trying to move funds.
“The sophistication of money laundering techniques in a world of artificial intelligence and deep fakes and all that, has run out ahead a little bit of, certainly regulators, and financial institutions,” he said on Friday.
“Not so far that we can’t make adjustments in the next year or two to tighten things up, but enough that we need to move, and we are moving.”
Speaking at the TD Securities Financial Services Conference in Toronto, Routledge said the regulator is also increasing its focus in the area after parliament amended OSFI’s mandate last summer to explicitly include monitoring how well financial institutions protect against threats to their integrity and security.
FINTRAC, Canada’s financial intelligence agency, has also signalled increased scrutiny of the issue. In December, the agency levied a $7.4-million penalty against RBC and a $1.3-million penalty against CIBC for non-compliance with anti-money laundering and terrorist financing measures. In the 2022-2023 financial year, by comparison, it levied $1.1 million in total fines across all business lines.
Routledge said OSFI would be working more closely with FINTRAC as digitization and the more integrated global economy lead to higher risks of money laundering.
The regulator will also be taking its message to financial institutions that they need to step up efforts against the problem, he said in media availability following the event.
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