Paper details
| Paper authors | Sangeeta Goswami |
| In panel on | The New Determinant of Humanitarian Access and Patterns of Reach in Syria and Yemen – Risk, Banks and Counter Terrorist Financing Legislation |
| Paper presenter(s) will be presenting |
In-Person / |
Abstract
The increasing focus on access to financial services for non-profit organisations (NPOs) is justified because of the size and relevance of the sector, and given the latest empirical research on NPO access to mainstream banking channels. The research undertaken by HSC and ECNL sought to understand the drivers and impact of ‘derisking’ on NPOs. The working hypothesis was that ‘derisking’ occurs at the intersection of frameworks for security and regulation, and it is only by unpicking the mechanisms of governance and accountability involved that one can begin to approach the problem in anything like a comprehensive manner. Given there are multiple stakeholder imperatives – political, regulatory and institutional – the research goal was to understand and analyse the perspectives of stakeholders relating to the effects of anti-money-laundering (AML) and countering the financing of terrorism (CFT) rules on decisions taken by Financial Institutions (FIs) to derisk NPOs. Focusing on three countries, Brazil, Mexico and Ireland, multiple stakeholders from NPOs, FIs, Central Banks and relevant government ministries were interviewed. The research found that NPOs were spending more time getting transactions processed or having difficulty on-boarding as a client, were unaware of systemic drivers behind decisions by banks (including on closing down accounts), were impacted more based on size, and had seen an increase in workload for their financial staff compared to five years ago. Impacting the rollout of the SDGs, the financial inclusion agenda, civic space in general, as well as the C/PVE agenda, policy incoherence was found to be at the heart of the issue, as was an ownership gap in addressing it. The research goes on to posit both technical and systemic remedies in some detail.
Presenters
Human Security Collective