Journal of Banking Regulation

, Volume 20, Issue 3, pp 260–273 | Cite as

Reconciling contradictory forces: financial inclusion of refugees and know-your-customer regulations

  • Uuriintuya Batsaikhan
  • Zsolt DarvasEmail author
  • Inês Gonçalves Raposo
Original Article


Providing access to financial services for asylum seekers and refugees is made difficult by know-your-customer financial regulations adopted as part of efforts to tackle money laundering and terrorist financing activities. Difficulties in identifying asylum seekers and refugees further complicate the urgent necessity of opening simple bank accounts, which is a crucial step towards integration. We review certain financial inclusion initiatives and assess European Union banking regulations from the perspective of offering financial services to asylum seekers and refugees. We conduct a novel survey of banks in the European Union to shed light on banks’ attitudes to the financial integration of refugees, their assessment of the relevant banking regulations and possible public–private partnerships to improve the financial integration process. We conclude that the solution to the financial inclusion problem is not to ease regulation, but to tailor it to the specific needs of refugees, while offering clear guidelines to banks and improving refugee identification. We make several recommendations, including the issuance of a European identification document to each refugee and the development of a pan-European registry of refugees.


Financial regulation Financial inclusion of refugees Integration of refugees and migrants Know-your-customer regulation Anti-money laundering Combating the financing of terrorism 



The authors are thankful to the MasterCard Center for Inclusive Growth, which provided funding to Bruegel to carry out this research. The authors had complete academic freedom to work on this research. The authors are grateful to Bruegel colleagues and seminar participants at Bruegel (Brussels), DIW Berlin, Institute for International Affairs (Rome), France Stratégie (Paris) and University of Pécs for comments and suggestions. For our survey, we would like to thank the representatives of Erste Bank, FOREX Bank Sweden, Santander, POST Finance Luxembourg, Europa Bank Greece, Banka Popolare Etica Italy, National Bank of Greece and to the representatives of seven other financial institutions who wished to keep the names of their institutions anonymous. We also thank the European Banking Federation, the European Savings and Retail Banking Group, Finance Norway and UK Finance for their support.


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Copyright information

© Springer Nature Limited 2018

Authors and Affiliations

  • Uuriintuya Batsaikhan
    • 1
  • Zsolt Darvas
    • 1
    • 2
    Email author
  • Inês Gonçalves Raposo
    • 1
  1. 1.BruegelBrusselsBelgium
  2. 2.Corvinus University of BudapestBudapestHungary

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