Banking Sector the Most Robust and Advanced Sector in Fight Against Money Laundering – Report
Ghana’s banking sector has been recognised as the most robust segment of the financial services industry in combating money laundering, terrorist financing and proliferation financing (ML/TF/PF), according to the 2024 National Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing (AML/CFT/CPF) Risk Assessment Report.
The report highlights that the sector benefits from a strong regulatory and supervisory framework, anchored by the Bank of Ghana (BoG), and reinforced by comprehensive laws and regulations designed to prevent abuse of the system for illicit financial activities.
The banking industry remains the largest component of the country’s financial services sector. According to the BoG 2023 Annual Report, the industry’s total assets stood at GH¢297.5 billion. The sector is composed of 23 universal banks, one development finance bank, 26 savings and loans companies, 15 finance houses, 147 rural and community banks, 177 microfinance institutions, two leasing finance firms and 401 foreign exchange bureaux.
Despite its resilience, the sector’s central role in the economy exposes it to ML/TF/PF risks, particularly through high volumes of cash transactions and vulnerable products such as private banking and current accounts. Other risk areas flagged include the enforcement of criminal sanctions and pressures from market participants to comply with evolving AML standards.
In view of that, authorities have recommended targeted measures to reduce vulnerabilities that include:
Facilitating access to beneficial ownership (BO) data: The BoG and the Financial Intelligence Centre (FIC) are urged to work with the Office of the Registrar of Companies (ORC) to make BO information readily available to banks at little or no cost, strengthening customer due diligence (CDD).
Strengthening ID verification systems: The BoG and National Identification Authority (NIA) should provide alternative verification options for the Ghana Card to prevent disruptions when the main system encounters technical issues.
Accelerating the cashless agenda: The BoG is encouraged to fast-track implementation of a cashless system to reduce risks associated with cash transactions.
Capacity building: Banks and non-bank financial institutions (NBFIs) are advised to continually improve staff knowledge of ML/TF/PF risks and compliance obligations.
In alignment with the Financial Action Task Force (FATF) 40 Recommendations, Ghana has positioned itself as a significant global player in the fight against financial crime, with a legal, regulatory and institutional framework aimed at deterring, detecting and prosecuting ML/TF/PF activities.
The report concludes that while Ghana’s banking sector has proven resilient in mitigating illicit financial risks, the pace of regulatory enforcement, the robustness of identification systems and the sector’s transition towards a less cash-reliant economy will be pivotal in sustaining its effectiveness.
