Canada’s anti-money laundering agency plans scorecard to improve monitoring, sources say

TORONTO –

Canada’s anti-money laundering agency is looking to introduce a system that gives financial institutions and other businesses real-time feedback through scorecards, two sources said, as the regulator ramps up initiatives to tackle financial crime.

The proposed reporting system follows stricter financial crime penalties in Canada announced earlier this week after the country’s No. 2 bank TD was ordered to pay a record US$3 billion fine and pleaded guilty in a historic U.S. money laundering case in October.

The regulator, Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), is looking at technology, including AI, to deliver the scorecard and is expected to introduce it next year, one source said.

FINTRAC aims to give more real-time feedback to reporting entities to improve collaboration across the industry, another source said.

Canada’s federal government made new proposals in its fall economic statement on Monday to give the regulator more powers, including increasing financial penalties by as much as 40 times and issuing compliance orders.

U.S. regulators’ probe into TD Bank resulted in calls for stronger regulations in Canada. In pleading guilty, TD admitted former employees helped criminals launder millions of dollars.

Canadian banks TD, Royal Bank of Canada and CIBC have been fined by FINTRAC in the past two years for failing to comply with money laundering and terrorist financing rules.

Canada faces growing pressure to tackle financial crime ahead of a review by the Financial Action Task Force, an intergovernmental body made of up 40 international members.

(Reporting by Nivedita Balu in Toronto; Editing by Caroline Stauffer and Hugh Lawson)