Alternative data use, hitherto an increasingly sophisticated niche occupied by Western hedge funds, is now going mainstream by virtue of improvements in data accessibility and a growing array of alternative data services. Broadening beyond the hedge fund world, alternative data is now starting to be used routinely by nearly all types of financial institutions.

With financial services now globalized, countries around the world have to coordinate with each other to prevent money laundering and terrorist financing.Their AML/CFT regimes are evaluated by the Financial Action Task Force (FATF), an international organization. If a country were to fail an FATF evaluation, its international reputation would be tarnished. We spoke to Hiroshi Ozaki, Director of the Japanese FSA’s ALM/CFT Policy Office, about what Japanese financial institutions’ immediate priorities should be.