Home 5 News 5 ACFID News 5 Strategies for NFP’s to navigate the rising trend of de-risking by financial institutions

Strategies for NFP’s to navigate the rising trend of de-risking by financial institutions

Aug 20, 2021 | ACFID News

ACFID 2022-23 Supplementary Federal Budget Analysis

De-risking by financial institutions is a growing trend impacting INGOs ability to deliver funds efficiently into developing world markets. The latest ACFID annual survey found that some 6% of those who responded had experienced this in some shape or form, limiting their ability to fund their international programs or partners.

Organisations working in the financial sector must keep up with changing compliance regulations and trends with respect to anti money laundering and counter terrorism financing. Failure to comply with regulations can damage an institutions’ reputation, lose customers, and subject them to severe penalties from regulators.

StoneX’s Michael Stachowiak, Head of Business Development (Global Payments) Australia and New Zealand, tells ACFID: “In the Australian market, [de-risking] has occurred with growing regularity as banks respond to regulators requests to tighten up their policies and procedures. De-risking is a strategy that some institutions employ when they cannot efficiently manage these money laundering risks. In this process, institutions tend to increase their expenditures for compliance programs, take new measures, and critically sever relations with countries and customers they see as higher risk.

“INGOs are often unfairly being caught in the cross hairs, given their tendency to work in higher risk markets (e.g. Myanmar, Syria, Afghanistan), places quite often that are greatest in need.”

Michael shared with ACFID several strategies charities working in the international aid and development space can implement to mitigate this trend:

1. Working with a specialist FX provider that has a strong historical track record, understands the risks and has the appropriate controls in place to manage flows into high-risk jurisdictions

2. Holding accounts with multiple financial institutions, given the varying risk appetites between them

3. Centralising treasury functions at a global level when working across multiple markets resulting in pooling of funds and global disbursements coming from a single trusted location

4. As far as possible, employing a just-in-time funding approach to avoid leaving large balances held captive onshore in a higher risk market that could be frozen or denied repatriation

StoneX will be hosting a panel discussion at the upcoming ACFID National Conference diving into this topic further with first-hand accounts from representatives of Anglican Aid, Care Australia and Islamic Relief Australia. Please sign up today to attend.

ACFID formed a Corporate Partnership with StoneX (previously known as INTL FCStone), one of the world’s leading Global Payment Exchange providers, in 2020, after their years of longstanding support and sponsorship of the ACFID National Conference. You can read more about our partnership here.

2021 ©StoneX Financial Ltd (Company). All rights reserved. The Company is registered in England and Wales with company number 5616586 and is authorised and regulated by the Financial Conduct Authority FRN446717. This document and the information herein is provided confidentially for information purposes only to the recipient and shall not be deemed to be an offer for the sale or purchase of any financial services product transaction or advice.  This information is provided on an ‘as-is’ basis and may contain statements and opinions of the Company as well as excerpts and/or information from public sources and third parties to which no warranty, whether express or implied, is given as to its accuracy. The Company (on its behalf and on behalf of its group, directors, employees and agents) disclaims any and all liability as well as any third-party claim that may arise from the accuracy and completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party.

About

A woman in a brightly coloured scarf peers through coffee bean bushes on either side of her.

Annual Report 2021-22

Reporting on ACFID’s activities to ensure transparency and accountability

ACFID

ACFID is the peak body for Australian NGOs involved in international development and humanitarian action.

Our PARTNERSHIPS

ACFID works and engages with a range of strategic partners in addition to our members.

GOVERNANCE

ACFID is governed by its Board, ACFID Council, and various expert and governance committees.

Members

Conference

Conference 2022

HEALTHY PLANET, HEALTHY COMMUNITIES Acting with evidence, equity and inclusion for a resilient future

Meet our Members

The ACFID membership is comprised of Australian NGOs that actively work in the international aid and development sector.

Become a member

Joining ACFID means joining an experienced and powerful mix of like-minded organisations committed to good international development practice.

Membership types & fees

ACFID has two types of organisational membership: Full Membership and Affiliate Membership.

State of the Sector

The State of the Sector Report provides a comprehensive and robust analysis of the state of the Australian aid and development sector.

NGO Aid Map

ACFID’s NGO Aid Map allows the Australian public and stakeholders to explore the work of ACFID Members around the world

Our Focus

Budget Analysis

Federal Budget 2022 Analysis

Facts and figures on how aid is presented in this year’s annual budget

Strategic Plan

ACFID prioritises a robust response to climate change and pressure on civil society in developing countries, as well as other key priorities.

Emergency Aid

ACFID Members provide vital life-saving assistance in the immediate aftermath of an emergency.

Climate Change

Action on climate change is one of ACFID’s highest priorities, as it is an existential threat to humanity and our development.

Civil Society

Civil societies are a cornerstone of regional stability and ensure that the voices of the marginalised are heard.

Supporting NGOS

Supporting NGOs as Valuable Partners.

Inclusive & locally led development

Walking the talk on inclusive development.

Humanitarian Action

Taking humanitarian action for those in greatest need.

Elevating Development

Elevating Development to the Heart of Australia’s International Engagement.

PSEAH

Improving standards, practice and culture to prevent and respond to sexual exploitation, abuse and harassment.

Code of Conduct

A small girl stands in front of a multi-coloured finger paint artwork, with a blue paint covered hand

2022-23 ACFID Code of Conduct Review

The ACFID Code of Conduct is periodically reviewed to ensure it continues to reflect good practice and the needs of ACFID and its members.

Code of Conduct

The Code is a voluntary, self-regulatory industry code of good practice.

About the Code

Find out more about the Code of Conduct and how it operates.

Good Practice Toolkit

Overview and practical resources, and examples to support the implementation of the Code.

Spotlight on the Code

Provides a thematic ‘deep dive’ into each of the nine Quality Principles in the Code

Compliance

This section outlines the responsibility to be taken by each Member to ensure compliance with the Code.

Complaints Handling

How to make a complaint and information on the Code’s independent mechanism to address concerns relating to an ACFID Members’ conduct.

Other Standards

Mapping the Code with other professional standards and principles in the humanitarian and aid sector in Australia and internationally

Loading...