Wolfsberg Group Issues Guidance on SoW, SoF Checks

Source: Regulation Asia Editors, Regulation Asia 2020-08-10

The guidance outlines instances where Source of Wealth and Source of Funds information collected may need to be independently corroborated, and what to do if relevant standards are not met.

The Wolfsberg Group has published new guidance on how financial institutions (FIs) can identify, mitigate and manage money laundering risks by undertaking source of wealth (SoW) and source of funds (SoF) checks on customers.

SoW assessments seek to identify how a customer accumulated their wealth, while SoF information provides an FI with the understanding of how and for what purpose an account is going to be funded.

Such checks are to be considered among the key elements of customer risk assessment and risk management for certain customers, allowing FIs to recognise risks and potentially suspicious activity, and note any inconsistencies which should be mitigated or escalated for further review, the Wolfsberg Group says.

“In line with regulatory expectations, FIs should adopt a risk based approach with respect to the amount of information collected, and corroboration required, for SoW/SoF purposes.”

The guidance outlines instances where SoW and SoF information collected may need to be corroborated with additional supporting information from a source independent from the customer, and what to do if the information cannot be corroborated, or if SoW/SoF standards are not met.

The guidance, available here, is primarily aimed at FIs’ private banking and wealth management customer segments.

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Wolfsberg Group Issues Guidance on SoW, SoF Checks

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