The European Banking Authority (EBA) is an independent EU authority responsible for ensuring effective and consistent regulation and supervision across the European banking sector. Established in 2011, the EBA plays a crucial role in harmonising rules, strengthening consumer protection, and promoting sound governance.
In the field of AML compliance, the EBA issues guidelines and regulatory standards that help financial institutions detect, prevent, and report financial crime, ensuring alignment with EU legislation and global standards.
European Banking Authority (EBA)
The European Banking Authority (EBA) is part of the European System of Financial Supervision. It works to safeguard the stability of the EU banking sector by creating technical standards, issuing guidance, and monitoring risks.
Specifically, in AML and counter-terrorist financing (CTF), the EBA:
Develops Regulatory Technical Standards (RTS) to harmonise compliance rules across Member States.
Issues guidelines on risk-based supervision for money laundering and terrorist financing.
Coordinates with EU institutions like the European Commission to ensure consistent AML/CFT application.
The EBA also directly supports national regulators by providing oversight, guidance, and training in areas where risks are evolving rapidly.
Why The EBA Matters In AML Compliance
The EBA matters in AML compliance because it sets expectations for how banks and financial institutions should structure their frameworks to meet EU and global standards.
Harmonisation: The EBA promotes consistent application of AML rules across EU Member States, reducing fragmentation.
Supervisory guidance: Its guidelines help regulators apply proportionate, risk-based supervision across different sectors.
International alignment: The EBA ensures EU AML/CFT frameworks align with international standards such as those set by FATF. For example, its Guidelines on ML/TF Risk Factors explicitly reference FATF Recommendation 10 on Customer Due Diligence as a benchmark when establishing EU risk factors and due diligence rules. It is also developing Regulatory Technical Standards under the new AML/CFT package designed to harmonise EU risk assessment and control measures in line with global norms.
By shaping supervisory practices, the EBA strengthens Europe’s defence against financial crime and reduces opportunities for regulatory arbitrage.
Key Functions Of The EBA In Compliance
The EBA has several functions that directly impact financial institutions and their compliance obligations.
Developing Regulatory Technical Standards
The EBA drafts binding technical standards to ensure AML directives and regulations are applied consistently across EU jurisdictions.
Publishing Guidelines And Opinions
It issues guidelines on risk factors, transaction monitoring, and customer due diligence that institutions must follow when managing AML obligations.
Coordinating Supervisors
The EBA facilitates cooperation between national regulators, ensuring that supervisory practices are aligned and financial crime risks are managed across borders. It does this through structures like AML/CFT colleges and coordinated oversight, enabling supervisors in different countries to exchange information and act jointly on cross-border risks
The Future Role Of The EBA In AML Compliance
The EBA’s role will evolve as the EU transitions to the new AML/CFT framework, including the establishment of the Anti-Money Laundering Authority (AMLA). While AMLA will become the central supervisory body, the EBA will continue to provide guidance, issue technical standards, and oversee areas connected to prudential regulation and consumer protection.
The European Banking Authority (EBA) will maintain its role in ensuring supervisory convergence by promoting comparable supervisory practices across EU Member States, working closely with AMLA and the European Commission to avoid regulatory gaps. It also provides guidance on technology adoption and risk assessment, such as through its updated ICT and security risk management guidelines under DORA, to support consistent cross-border cooperation.
As AML frameworks become more data-driven, the EBA’s guidance on technology adoption, risk assessment, and cross-border cooperation will remain vital.
The EBA’s guidance on technology adoption, risk assessment, and cross-border cooperation will remain vital. Its latest Guidelines on ML/TF Risk Factors update includes new measures for emerging tech like remote onboarding and crypto-asset risk; the much-anticipated AML Technical Standards make proposals for harmonised risk assessment and due diligence across the EU.
Strengthen Your Compliance Framework With EBA Standards
The EBA’s standards set the foundation for compliance across Europe. Institutions that align with its guidance not only meet regulatory obligations but also strengthen their resilience against financial crime.
Facctum’s Customer Screening and Transaction Monitoring solutions enable institutions to align with EBA guidelines while managing risk in real time.
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