FATF greylisting and financial inclusion
Think tank: RUSI
Author(s): Arzu Abbasova
June 16, 2026
This report from UK think tank RUSI offers policy solutions to balance financial integrity with financial inclusion.
This paper reveals how FATF greylisting – the designation of countries as ‘jurisdictions under increased monitoring due to strategic deficiencies in their anti‑money laundering and countering the financing of terrorism (AML/CFT) regimes’ – can unintentionally undermine financial inclusion.
By examining some of the greylisted countries, the research highlights the indirect consequences of greylisting via compliance pressure, such as increased costs, banking sector retrenchment and restricted access to financial services for vulnerable populations.
Key Recommendations:
Establish policy coordination mechanisms: Create joint working groups and develop dual expertise within regulatory bodies to align financial integrity and inclusion objectives.
Foster professional judgement in compliance: Regulators should allow for risk-based decisions and encourage a ‘comply or explain’ approach, reducing excessive de-risking and supporting substantive risk management.
Sequence AML/CFT measures carefully: New compliance requirements should be implemented with transitional arrangements to avoid excluding populations lacking immediate access to identification or formal channels.
Address financial exclusion risks robustly: The Financial Action Task Force (FATF) should produce dedicated guidance on financial exclusion, including quantitative tracking of know-your-customer impacts and clear steps for mitigation.
Enhance assessment expertise: FATF evaluation teams should include financial inclusion and technology experts to better capture risks and opportunities from new financial technologies.
Measure financial inclusion outcomes: Countries should conduct follow-up assessments comparing inclusion data before and after greylisting to inform policy adjustments.
This paper highlights the strategic importance of balancing financial integrity and inclusion and provides actionable recommendations for policymakers and regulators.
