Anti-money laundering is still very much “work in progress” within the banking industry, with plenty of work left to be done, but banks are clearly committed to the war against money laundering and international terror.
In its 2004 Anti-Money Laundering Survey, consulting firm KPMG said the challenge for policymakers and law enforcement is to engage the industry more effectively, give banks evidence that their efforts are leading to higher detection rates and prevent the industry from being used by criminals.
According to the survey, banks across the world are putting more money into anti-money laundering (AML) systems and meeting compliance requirements than ever before.
Of the 209 financial services institutions interviewed about their spending over the last three years, 83 per cent said they have invested more in AML systems, on average by 61 per cent more.
The trend is set to continue with most banks expecting spending to rise by over 40 per cent over the next three years, demonstrating that much remains to be done to enhance AML systems and controls.
KPMG says the main driver behind the past and projected increase in spending is transaction monitoring. Banks are steadily increasing the sophistication of their monitoring methodology with over 40 per cent of respondents having already implemented externally developed automated monitoring software.
While many banks continue to rely on staff vigilance and exception reports, many of these are planning to implement more sophisticated systems.
Training is the second biggest contributing factor to increased spending, with banks showing a strong preference for face-to-face training than computer-based training.
KPMG says increased regulation and fears over financing of terrorist groups have undoubtedly boosted investment in AML measures and the banks have rightly identified transaction monitoring and training as key areas for investment.