A new survey from PricewaterhouseCoopers has discovered that although UK financial services institutions have implemented new anti-money laundering (AML) guidelines, few can quantify the anticipated cost savings.
The survey, based on 148 interviews with money laundering reporting officers (MLROs) and other compliance professionals with AML responsibilities from the UK financial services sector, reveals that 91% of respondents are satisfied that their organisations have implemented the new risk-based approach to AML set out by the Financial Services Authority (FSA). The risk-based approach involves identifying, assessing, mitigating, monitoring and documenting risks of money laundering.
But some 82% of respondents indicated that they had not noticed any cost benefits from implementing the new approach. Of those respondents who had not identified any cost benefits to date, 64% said they never expect to see any benefits. Further, a large percentage (86%) of those surveyed were unable to quantify total spend on AML compliance in the previous year.
On a more positive note, the survey acknowledges the engagement of senior management with the new AML system, and some 84% respondents said they had a strategic response to money laundering threats in place but challenges still remain. Training staff (54%) was cited as the foremost challenge along with technology implementation (54%), the need to work to global standards (45%) and the effectiveness of monitoring systems (43%). Enhancing policies and procedures, specifically in terms of more automation and transaction monitoring, and better systems/computer software was also highlighted.
“It is reassuring to see that the UK financial services industry is taking the right steps to combat money laundering,” said Andrew Clark, partner, anti-money laundering services, PricewaterhouseCoopers. “But it is clear that progress still needs to be made, at a time when there has never been greater pressure on financial institutions to ensure their anti-money laundering controls are fit for purpose. Financial institutions are making major investments in AML controls and it is important for them to know whether the money is being well spent. We would urge greater attention to the costs involved to help meet the challenges of tackling economic crime.”
He adds: “Financial services institutions need to ensure that their MLROs are adequately supported and advised. It is also crucial to address the efficiency of their AML systems, many of which are proving ineffective at identifying suspicious transactions.”
The week on Risk.net, August 19-25, 2016Receive this by email