To make it easier for the participants to manage their liquidity, it will be possible to move liquidity within the RIX family from RIXRTGS to RIXINST and vice versa around the clock, which guarantees smooth and cheap settlement of payments.10 The aim is that an institution wishing to become a member of RIXRTGS will not need to be a member of RIXINST or vice versa. If we add the TIPS platform to RIX, it will thus be possible for financial institutions to settle payments in central bank money around the clock. How would TIPS affect the Swedish payment market? If the Riksbank decides to use TIPS to provide a settlement service 24/365, most private individuals and companies will not notice any difference in the short term. However, the institutions participating in RIXINST will need to adapt their message formats and processes to the regulatory framework applying for instant payments in large parts of the rest of Europe. As with all other harmonisation, there will be a balance between a possible need for tailor-made national solutions and the profits that can be reaped from full participation in the EU’s single market. Of course there may be advantages if a market “does its own thing”, but in the long run I believe that Sweden has a lot to gain in adapting to the rest of the EU in this respect. Sweden is ahead of its European neighbours in the journey towards a cashless society, and Swedish banks and FinTech companies are well-equipped to continue launching innovative payment services.

Robust compliance function The compliance function of a financial institution is an important element in mitigating risks of abuse of the financial system, especially financial crime and terrorism financing risks. To this end, financial institutions are expected to ensure that the compliance function is independent and have sufficient authority, stature and resources to perform its function effectively. The required AML/CFT compliance program of each institution must clearly describe and outline the roles and responsibility of different segments of the institutions with respect to its compliance function. In this regard, the principle of collective responsibility between senior managements and compliance officers should be upheld in the case of failure. In compliance, continued vigilance is necessary and required. The 2017 National Risk Assessment, by the National Coordinating Committee for Money Laundering (NCC) and the financial sector, showed that the banking sector continues to face high money laundering risk and medium high terrorism financing risk. The sector records the highest value of cash transactions and high risk customers; and provides the highest number of high risk products compared to other sectors within the financial industry. This reflects the central role of the banking sector in intermediating money flows within an economy. One important compliance function that needs to be undertaken is the identity of the ultimate beneficial owner of companies, assets and financial transactions. Financial institutions need to have controls and procedures to identify, verify and conduct due diligence on the beneficiaries. This must be complemented by a rigorous monitoring process.