Apac banks to increase spending on AML technology - study

Around 60% of the 18 heads of risk management and AML and compliance leads in Australia, India and the Asean region (including Indonesia, Malaysia, Philippines, Singapore and Thailand) surveyed for the study said they still needed to improve areas of their AML regime.

Primary implementations instituted include developing rigorous standards of due diligence for customer identification and acceptance and transaction monitoring.

Accorrding to the study, investments will centre round technological implementation, transaction monitoring and account opening procedures.

Li-May Chew, CFA, senior research manager, Apac risk management advisory service, Financial Insights, says: "Asian banks are becoming less blasé about AML compliance. Whilst interest was previously localised in mature markets, a new wave of enforcement is placing pressure on regional banks in both developed and emerging Asia alike to meticulously observe the doctrine of AML."

Chew says that countries like Australia, India, Singapore and China have introduced wide reaching regulatory changes and that stiff penalties such as fines, temporary closure or even taking away business licences are forcing banks to act to stengthen AML processes.

Of those questioned, 83% currently use some form of vendor application to counter financial crimes. Financial Insights says the research also shows potential focus areas for vendors looking to capitalise on opportunities in the region. Amongst them is the need for customised, 'best-in-class' approaches - such as pattern detection and adaptive profiling - and the need for a range of ancillary services.

"Institutions in these countries are scrambling to demonstrate active development and implementation of adequate AML programmes, and would be the lower-hanging fruits for vendors, providing the most immediate returns relative to cost and effort," says Chew.