Money laundering risk assessment for the banking sector published

The Isle of Man Government has today published its Money Laundering Risk Assessment for the banking sector. The assessment builds upon the 2020 National Risk Assessment (NRA) and forms part of the broader programme of sector-specific NRAs being released in support of the National Financial Crime Strategy 2024–2026.

The report highlights that the banking sector remains central to the Island’s economy, holding over £40 billion in deposits and processing nearly £80 billion in annual payments. While the sector demonstrates strong Anti-Money Laundering (AML) controls and regulatory compliance, its international profile and rapid transaction capabilities contribute to a medium-high overall Money Laundering (ML) risk rating.

The assessment identifies a number of emerging threats, including cyber-enabled crime, fraud, and the misuse of virtual assets, and outlines several proposed actions to further strengthen the sector’s resilience. These include expanding typology documentation, enhancing collaboration to reduce fraud risk, and improving data systems to better understand financial flows.

The banking sector report is the first of a number of sectoral reports that are due for release in 2025 and early 2026.  It will be followed before the end of 2025 by reports covering the Gambling, Insurance, and Trust and Corporate Service Providers (TCSPs) sectors.

Sector and topic-based assessments will feed into the overarching NRA as part of a ‘ground up’ approach to establishing a detailed picture of the risks facing the Isle of Man.  Work is also well advanced on several other reports, including the Proliferation Financing (PF), Money Laundering (ML), Virtual Asset Service Providers (VASPs) and Legal Persons and Arrangements (LPA) risk assessments.

The NRA underpins the Island’s entire AML/CFT/CPF regime, as well as informing the Financial Crime Strategy and All-Island Action Plan.

Extensive industry engagement will take place to ensure Island firms have a thorough understanding of the NRA and relevant sector risk assessments. The Isle of Man Government was not expecting many significant changes since the previous NRA was published in 2020.  Any updates will be highlighted to businesses in document summaries and supporting materials.

Further information will be provided during meetings and workshops to strengthen awareness and underline the need for firms to use the NRA findings to update their policies and procedures, including Business, Customer and Technology Risk Assessments.

Jane Poole-Wilson MHK, Minister for Justice and Home Affairs and AML/CFT Lead for the Isle of Man Government, said: ‘The banking sector report provides valuable insights to help the sector and authorities continue to adapt and strengthen our defences against financial crime. I would like to personally thank colleagues from the sector who participated in its development. The NRA process relies on a considerable volume of data that needs to be collected and analysed for the risk assessments to be as robust as possible. I appreciate the time and effort that has been put in to produce a detailed report backed by good quality data.’

She added: ‘The NRA will have a significant bearing on the Island’s MONEYVAL mutual evaluation in October 2026. We continue to work collaboratively with businesses to enhance understanding and ensure they are well prepared to communicate how their internal compliance regimes reflect the sectoral and national risk assessments.’