Banks reach tipping point in fight against financial crime - research

UK banks are reaching a tipping point in the fight against financial crime, with more than 60% agreeing that there is enough or too much regulation, but inadequate enforcement, according to research from LexisNexis Risk Solutions.

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Banks reach tipping point in fight against financial crime - research

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Britain's biggest banks are now spending as much as £660 million a year on anti-money laundering compliance, yet are still concerned about their ability to effectively combat risks in a fast-changing financial crime landscape, says the research, based on interviews with nearly 200 senior AML professionals.

Gripes about regulation among respondents are common. Nearly a third think that the Fourth EU AML Directive will have no effect - or could even increase levels - of money laundering across Europe.

The report highlights concerns about a shortage of AML compliance professionals in the UK. And increasing levels of personal liability are expected to exacerbate this gap, as half say the Senior Managers Regime would make their jobs more or a lot more stressful. An even greater number - 54% - say if they had the opportunity they would choose another career path in light of the increased personal liabilities.

When looking at the future, 44% of banking and financial services professionals say evolving criminal methodologies will be the biggest single emerging financial crime risk to their business in the next year. Meanwhile, 13% think it will be a lack of personnel in their risk function.

What’s more, over the next two years, preventing cybercrime will be the single biggest area of investment for more than a third of respondents, with the next two most common answers being fraud, on 23% and AML, 20%.

The expansion of online and mobile banking, and particularly virtual currencies, are seen to be the most significant challenges banks are set to face in the future when fighting financial crime.

Chrisol Correia, director, global AML compliance, LexisNexis, says: "British banks are on the front line in the battle against financial crime. Both the nature of their business and regulatory design has positioned them as the first line of defence against money laundering, terrorism funding, and an expanding array of other illicit activities.

"Speaking to those who dedicate their careers to tackling financial crime reveals genuine fears about the ability of banks to continue to perform this function in the future, however."

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Comments: (2)

A Finextra member 

Judging from recent cases, one issue is the enemy within the gates.

Hitesh Thakkar

Hitesh Thakkar Technology Evangelist (Financial Technology) at SME - Fintech startups (APAC and Africa)

'Preaches and Practices Gaps' which is seen in almost any compliance audits/assessments is teething issue for enterprises. The impacts are high in case AML where practisoners are in Cross hairs.

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