The Covid-19 pandemic has led to unprecedented global challenges，human suffering and economic disruption. The global community is sparing no effort to combat the spread of the coronavirus by enhancing public health systems，minimizing economic damage and ensuring public safety and order. The coronavirus has caused widespread disruption to international financial markets and provided favourable climate for generating and laundering illegal proceeds. Criminals have been agile to grab opportunities to exploit the crisis. Financial institutions are experiencing compliance challenges linked to the outbreak and government resources have been reprioritized in the effort to respond to the challenges of the coronavirus.

Limitations to Customer Due Diligence

Many banks have closed their physical branches，shortened their business day or limited in-person financial services. Such challenges currently facing banking practitioners encompass the difficulties associated with undertaking customer due diligence (CDD)，including appropriate levels of identification and verification –- particularly where on-site inspections are suspended and customers cannot be met face-to-face. According to the recommendations of the Financial Action Task Force (FATF)，a global standard setter on anti-money laundering，financial institutions are obliged to put appropriate due diligence procedures in place to prevent customers from opening accounts anonymously or under fictitious names. These due diligence measures should be taken whenever a financial institution begins a new business relationship，when certain types of transactions take place，and when there is suspicion of money laundering or indeed any doubts about a customer's identity. Many money laundering indicators such as a client exhibiting nervous behavior or taking a defensive stance to questioning can only be caught in face-to-face meetings. Under such non-face-to-face circumstances，banking practitioners are deprived of the aid of on-site inspection or in-person communication with customers. The lack of face-to-face interaction and inability to view a client's body gestures or facial expression results in lost opportunities to detect suspicious criminals. Additionally，when banks turn to regulatory authorities for supervisory advice on CDD，they may face "a much slower process" in dealing with their regulators in such a lockdown period where regulatory agencies are shorthanded just like financial institutions.

Surge in Cash Transactions