Clari5 Market Insights
KENYA
Central Bank of Kenya
ML / TF National Risk Assessment Report (NRA)
Central Bank of Kenya Launches Money Laundering / Terrorism Financing National Risk Assessment Report
By when must banks comply with the mandate?
With immediate effect.
Why has Central Bank of Kenya (CBK) issued the new mandate?
Kenya, due to its geographic placement in Africa is a natural trade and financial hub. Mobile banking far surpasses cash transactions in the formal economy. Kenya also has some of the most sophisticated financial infrastructure in Africa. Yet, Kenya is vulnerable to money laundering, financial fraud, and terrorism financing. Money laundering occurs in the formal and informal sectors, deriving from both domestic and foreign criminal operations, including transnational organized crime; cybercrime; corruption; trafficking of drugs, illegal timber, charcoal and wildlife; smuggling and trade-based money laundering; and counterfeit goods. CBK is seeking to tighten the implementation of laws to combat ML / TF.
Highlights of the mandate
On July 27, 2022, CBK launched the ML / TF National Risk Assessment Report (NRA). The report identifies and assesses Kenya’s ML / TF risks at a national and sectoral level. The recommendations in the NRA are:
- Data digitization is recommended to facilitate the update of withdrawal and addition of charges in the Judiciary and to shift from the current format for drafting charges where the focus is on the number of charges as opposed to the nature of charges.
- All the financial sector and other designated non-financial business and professions supervisors should implement a risk-based approach and effectively supervise their respective sectors for compliance. Further, regulators should adopt group-wide supervision to mitigate cross-sector ML / TF threats when appropriate.
- There is a need to conduct and continuously update sectoral and institutional risk assessment to establish the level of risk in various sectors for risk-based interventions to ML / TF threats in those sectors.
How Clari5 helps FIs in Kenya quickly comply with CBK’s mandates
Highlights
Advantages
Highlights
- Clari5’s differentiated approach uses AI as the central nervous system for banks. Clari5 connects data from disparate systems and intelligently determines potentially fraudulent activities
- Clari5 includes a real-time federated anti-fraud network enabling member banks to quickly identify new types of fraud activities
- Configure new scenarios and modify existing scenarios to combat emerging fraud patterns and risks, however sophisticated
- Behavior profiling based on emerging fraud patterns covering all channels and products across the bank, by synthesizing intelligence from multiple source systems and databases
- The engine receives transactions in real-time from transaction processing systems (Core Banking and remittance systems) to correlate and detect any suspicious money laundering schemes which then generates a case for manual investigation
Advantages
- Parallel use of AI / ML tools and graph analytics to extract new patterns, deploy them for better detection rates with lower false positives
- Case Management System to shrink analyst time on false positive investigation, using AI / ML driven models on past resolution data; workflow-driven investigation in a configurable centralized or decentralized manner
- Clari5’s web-based Scenario Authoring Tool configures new scenarios as / when required, without any coding or effort from the IT team.
- Entity link analysis feature helps expose customer / account associations and organized money laundering