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AML/CFT and new technologies: Challenges in Japan
Journal of Financial Compliance,
2
(4),
342-361
(2019)
Abstract
In the first half of this paper, as a background, the current status and challenges that Japan and Japanese financial institutions are facing to enhance the AML/CFT regime and prepare for the FATF fourth Mutual Evaluation on Japan to be held in 2019, are described. A summary of the latest status report by Japanese Financial Services Agency (JFSA), ‘Current Status of AML/CFT as of August 2018’ is given. The report consists of mainly two parts; the recent measures taken by JFSA and the high level observations of the financial sector in Japan. In the latter half of the paper, a brief explanation is given of how the JFSA and some financial institutions in Japan are considering new technology tools to solve challenges such as the complexity of financial crime compliance, heightened regulatory scrutiny and the increasing costs, including investment costs, for systems and databases that affect the process of following a risk-based approach for anti-money laundering (AML)/countering the financing of terrorism (CFT) in Japan. As an example, efforts and trials by a Japanese bank in using new technology as a solution in action, such as robotic process automation (RPA) and machine learning to make the process of AML/CFT regime more effective and efficient are shown.
Keywords: AML/CFT; FATF; Mutual Evaluation; Review; Japan; new technologies; RPA; RegTech; FinTech
The full article is available to subscribers to the journal.
Author's Biography
Hiroshi Ozaki joined the Financial Services Agency, Japan (JFSA) on 1st February, 2018 as a director of the AML/CFT Policy Office, which was newly established in the JFSA in February 2018 to enhance the control of risk of money laundering and terrorist financing (ML/FT) and establish a more effective regime to combat ML/FT in the Japanese financial industry. Prior to joining the JFSA, Mr Ozaki worked for 30 years in private financial sector and public sectors in Japan and overseas. He was a general manager in the Financial Crime Prevention Department of Sumitomo Mitsui Banking Corporation (SMBC) and began his career at the Mitsui Bank, currently SMBC, in 1988, where he served in various sections in domestic and overseas offices in New York, London and Dubai, in planning, marketing and compliance. Mr Ozaki earned his MBA from Stern School of Business, New York University and BA in economics from the University of Tokyo. He is a Certified Anti-Money Laundering Specialist (CAMS). He is also a member of the Japan Association of International Security and Trade, a chartered member of the Securities Analysts Association of Japan and a certified international investment analyst.
