Challenges for financial institutes in implementing robust customer due diligence in Pakistan

Nasir Sultan and Norazida Mohamed

Journal of Money Laundering Control, 2022, vol. 26, issue 5, 926-946

Abstract: Purpose - This study aims to investigates the challenges faced by Pakistani financial institutes (FIs) and regulators in implementing robust customer due diligence measures. Design/methodology/approach - The study adopted a qualitative technique. Twenty-five semi-structured interviews with chief compliance officers and regulators were conducted. Findings - The study concluded that the main challenges are name screening, obsolete nature and quality of databases and undocumented, unregistered and unregulated portions of the economy and society. In addition, identification and verification of high-profile customers and beneficial owners, lack of specialised staff and cost of compliance are the significant challenges faced by FIs in Pakistan. Originality/value - The Pakistani financial sector is less researched on anti-money laundering front, especially concerning customer due diligence. Further, the social, cultural and economic norms of the Indian sub-continent are more or less the same. Therefore, the study findings could be generalised to the region.

Keywords: Customer due diligence; Know your customer; Financial regulations; Financial institutes; Anti-money laundering (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-06-2022-0095

DOI: 10.1108/JMLC-06-2022-0095

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