An average gender gap of about 6 percentage points in low and middle-income countries (LMICs), per the latest Findex 2025 data, means that approximately 740 million women are excluded from the financial system, highlighting the need for action. This gap is even higher in Sub-Saharan Africa and the Middle East and North Africa at about 12-13 percentage points. To close the gap, we cannot relent in our financial inclusion efforts.
There are many barriers to financial inclusion faced by women, and anti-money laundering and counter-terrorist financing (AML/CFT) measures constitute a specific category. While many infrastructure and demographic dynamics affect a person’s ability to meet AML/CFT requirements, gender is a standout attribute. The Women, Business, and Law 2018 report highlights some of the legal disparities across different countries, whether it is a woman’s ability to apply for a national ID or a passport, to register their business, or open a bank account the same way as men. Even in cases when legal restrictions do not exist, other factors – largely influenced by sociocultural norms – can limit women’s access and mobility to obtain identification documents. Lower access to assets, often due to unequal inheritance or property ownership rights, can further deter women from attempting to obtain alternative forms of identification, such as a letter from a locally trusted authority. This is further worsened when women are unaware of the ways they can meet the customer due diligence (CDD) requirements, by, for instance, adding their names to utility bills.
While many infrastructure and demographic dynamics affect a person’s ability to meet AML/CFT requirements, gender is a standout attribute.
A risk-based approach (RBA) to AML/CFT measures has promised to level the playing field for women, but the promise has not fully materialized yet. Will this change with the newly revised Financial Action Task Force’s (FATF) Guidance on Financial Inclusion?
The 2025 revisions to the FATF Standards emphasize that AML/CFT measures should be ‘proportionate’ (replacing the previous term “commensurate” in Recommendation 1) to the identified risks. Previously, countries could elect not to allow simplified due diligence (SDD) measures, but now the Standards state that “where countries identify lower risks, they should allow and encourage simplified measures as appropriate.” Where women pose a lower risk, a proportionate approach can help financial service providers (FSPs) adopt SDD measures and allow more women to access the financial system. The recently amended and published FATF Guidance supports this objective and provides examples of countries that simplified measures in lower-risk scenarios with the goal of advancing financial inclusion.
Examples include mobile wallet providers in Senegal allowing users to open basic wallets with minimal documentation, providing a low-barrier entry point for financially excluded individuals who lack formal IDs (like women) into the formal financial system. Users can then graduate to more complex wallets by presenting a government-issued ID to an agent, which is then recorded and verified as part of the CDD process.
Where women pose a lower risk, a proportionate approach can help financial service providers adopt SDD measures and allow more women to access the financial system.
In Egypt, the Women Citizenship Initiative (WCI) helped an estimated half a million women receive formal ID cards and bypass challenges of acquiring proof of address. In 2020, the Central Bank of Egypt (CBE), in collaboration with the Egyptian Money Laundering Combating Unit, allowed FSPs to apply SDD for new customers opening traditional bank accounts without CBE approval, provided they did not offer new products or use new financial technology. In Bangladesh, the Bangladesh Bank mandated RBA, applying simplified CDD for 13 basic financial products aimed at low-income customers assessed as lower risk, in line with FATF recommendations.
The key question is whether women as a specific customer category can be a lower AML/CFT risk. Criminal justice statistics indicate that women may generally pose a lower crime risk than men. A Norwegian study in the Journal of Money Laundering Control found that only 4% of convicted white-collar criminals were female, and women constitute a small percentage of prisoners in countries like Pakistan (1.5%), Nigeria (2%), Indonesia (5%), and Kenya (5%), as of 2015. In Bangladesh, the Financial Intelligence Unit reported that 97% of all suspicious financial transactions in fiscal year 2015–16 were conducted by male account holders. This suggests that policymakers and FSPs could adopt an evidence-based approach to gender-specific AML/CFT measures.
Shifts in FATF Standards: opportunities and limits
The 2025 FATF Standards revisions ease the requirements for low-risk scenarios by replacing “strictly limited and justified circumstances” and “provided there is a proven low risk” with “limited and justified circumstances” and “assessed low risk.” This clarification allows countries to rely on their national risk assessments to formulate exemptions, potentially lightening the compliance burden for institutions serving lower-risk customers. Understanding gender-specific money laundering and terrorist financing risks could enhance risk assessments and reduce unintentional and unnecessary exclusion of women. This could also help policymakers and regulators be more gender intentional in their approach. However, based on a 2018 AFI survey, only Tanzania actively integrated gender-related risk factors into its National Risk Assessment (NRA).
Policymakers often apply FATF standards conservatively, and not ‘proportionately’ as hoped, due to uncertainty about the mutual evaluation assessors’ approach. There is also a need for a clearer definition of financial exclusion risk and more practical examples of tailored measures in diverse risk scenarios. While the earlier version of standards struck an overly cautious tone on simplifications and exemptions – discouraging regulators from applying them, especially in lower-income countries where they are most needed – the 2025 revisions reflect a welcome shift.
The updated language embraces a more enabling and balanced approach, creating a new momentum for risk-based implementation. Policymakers, regulators, and supervisors should seize the opportunity to leverage the revised standards to advance proportionate and inclusive measures, taking into account the differences in the risk profiles of men and women.
Incorporating gender considerations in national or sectoral risk assessment processes and consulting with gender-focused stakeholders in the risk assessment process is an essential first step, followed by encouraging the collection of sex-disaggregated data on the possession of eligible forms of ID, and implementing specific initiatives to raise awareness among women about CDD requirements.
