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

Author

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  • Nasir Sultan
  • Norazida Mohamed

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.

Suggested Citation

  • Nasir Sultan & Norazida Mohamed, 2022. "Challenges for financial institutes in implementing robust customer due diligence in Pakistan," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 26(5), pages 926-946, September.
    • Handle: RePEc:eme:jmlcpp:jmlc-06-2022-0095
    DOI: 10.1108/JMLC-06-2022-0095
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    Cited by:

    1. Nasir Sultan & Norazida Mohamed & Mervyn Martin & Hafizah Mohd Latif, 2023. "Virtual currencies and money laundering: existing and prospects for jurisdictions that comprehensively prohibited virtual currencies like Pakistan," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 27(2), pages 395-412, May.

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