Banks unhappy with anti money laundering systems

Bank boardroom focus on money laundering is at an all-time high, according to data released recently by accountancy firm, KPMG.

Broadly speaking money laundering is an activity that takes money derived from criminal activities such as fraud and obscures its origins so that it appears to have a legitimate source.

According to the data almost nine out of ten of the senior financial executives (88%) questioned for KPMG’s Global Anti-Money Laundering Survey said that money laundering issues are back at the top of the agenda in their organisation. The majority suggest that the issue is no longer being squeezed by competing priorities, as has been the case in recent years (only 62% focused on the issue in 2011).

A majority of respondents (84%) also admitted that money laundering is now considered a major concern within their business risk assessment, further emphasising how seriously management teams are taking failures to meet regulatory requirements.

“Anti-money laundering has never been higher on senior management’s agenda, with regulatory fines now running into billions, regulatory action becoming genuinely license threatening, and criminal prosecutions of firms and individuals becoming a reality," said KPMG's Brian Dilley.

Despite rising concern, satisfaction with transaction monitoring systems is poor, as one in three senior executives (35%) say their system is neither efficient, nor effective. Worse still, only just over half said their systems are able to provide the complete picture by monitoring transactions across businesses and jurisdictions.

A consistent regulatory approach was cited by senior executives as the top anti-money laundering concern, with 84% of respondents indicating that the pace and impact of regulatory changes are significant challenges to their operations.

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