Nine key actions to balance women’s financial inclusion and financial integrity

Know your customer (KYC) or customer due diligence (CDD) requirements that ensure compliance with Anti Money Laundering and Countering the Financing of Terrorism (AML/CFT) regimes to guarantee the integrity of the financial system are often cited as barriers to financial inclusion, particularly for women. The Alliance for Financial Inclusion (AFI) Global Standards Proportionality Working Group (GSPWG) has unpacked these constraints in a new guideline note, “Gender Considerations in Balancing Financial Inclusion and AML/CFT).”

Developed in partnership with the United Nations Capital Development Fund’s (UNCDF) Shaping Inclusive Finance Transformations (SHIFT), the guideline note supports the implementation of the Denarau Action Plan (DAP): the AFI Network Commitment to Gender and Women’s Financial Inclusion.

Drawing from the new AFI GSPWG guideline note, we provide the context and highlight the steps financial policymakers and regulators can take to better integrate gender considerations when implementing global AML/CFT standards, assessing Money Laundering & Terrorist Financing (ML/TF) risks, and conducting effective CDD.

What is the Challenge?

The implementation of global AML/CFT standards can have an unintended impact on women’s financial inclusion. For example, women are often less able to provide data for customer identification and the forms of ID required for verification as part of the CDD process. This in consequence makes them less able to access financial services.

  • 45 percent of women in low income countries do not have a foundational ID, compared to 30 per cent of men.
  • Only two percent of women and girls in Bangladesh have a passport.
  • In Cambodia, more men are able to provide utility bill documentation to meet KYC requirements than women (a five percent gender gap). Women are also less likely to possess formal business registration papers despite them owning more SMEs (65.1 percent) than men (34.9 percent).

This is explained by interrelated constraining factors exacerbated by sociocultural gender norms including in some jurisdictions, legal gender differences in how men and women can gain access to certain forms of identification.

Despite this challenge, some financial policymakers and regulators are proactively taking gender considerations into account when balancing financial inclusion and AML/CFT policy objectives. For example, Bangladesh disaggregates suspicious financial transactions reported by the sex of the account holder and considers gender differences in crime statistics when assessing the risk profile of individuals in its NRA. AFI GSPWG concluded however that gender considerations can be better taken into account by financial policymakers and regulators.

In this context, AFI and UNCDF see that financial policymakers and regulators can take the following nine key actions to integrate gender considerations when implementing global AML/CFT standards:

  1. Incorporate gender considerations into risk assessment processes.
  2. Consult with gender and women’s financial inclusion experts in any NRA process.
  3. Implement proportionate identification and verification requirements in line with a risk-based approach (RBA).
  4. Encourage FSPs to take action to understand and serve women clients effectively.
  5. Encourage the collection of sex-disaggregated data on possession of eligible forms of identification documents to highlight any gender differences.
  6. Measure the impact of proportionate AML/CFT regulations such as simplified CDD on financial inclusion, to quantify the benefits.
  7. Consider the potential of biometric identification to support the CDD process in line with global AML/CFT standards, and ensure sufficient enrolment of women and girls in such programs. This is in recognition that among some groups of women and girls, barriers to accessing identification will persist even with the introduction of biometrics. So, gender balanced coverage may still be a challenge.
  8. Consider the legal differences in women’s and men’s access to different forms of identity documents and the impact on women’s financial inclusion.
  9. Consider specific initiatives to raise awareness among women of the personal identification documents needed to meet CDD requirements. This may involve engaging with women’s business associations, civil society organizations, producer groups and other channels to reach low-income women.

Striking a balance between promoting women’s financial inclusion and financial integrity is possible

Policy responses to global AML/CFT standards have the potential to effectively manage ML/TF risks while making a positive contribution to women’s financial inclusion. This requires the adoption of proportionate, risk- based approaches to implementing AML/CFT standards and the rolling out of initiatives such as tiered KYC, simplified financial products and digital ID systems to overcome the identification challenges of women who are financially excluded or underserved. Doing so will allow the effective management of ML/TF risks and make a significant contribution to closing the financial inclusion gender gap.


UNCDF’s Shaping Inclusive Finance Transformations (SHIFT) programme aims to expand women's economic empowerment through financial inclusion. SHIFT advances financial markets by changing the behaviour of market actors to stimulate investment, business innovations and regulatory reform in growing inclusive enterprises. SHIFT catalyses innovative partnerships to accelerate financial inclusion and women's economic participation in the least developed countries of the ASEAN and SAARC regions.

UNCDF’s SHIFT ASEAN programme is supported by the Australian Government.


This publication has been funded by the Australian Government through the Department of Foreign Affairs and Trade. The views expressed in this publication are the author’s alone and are not necessarily the views of the Australian Government.

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