Majority of financial services firms are only ‘somewhat confident’ in AML procedures

“Without the right processes in place, companies are not only at risk of fines, but also of letting dirty money pass through their organisations.”

The survey found that 52% of respondents have identified an instance of money laundering in the last year, with 23% identifying more than one. Anti-money laundering is also moving up the company agenda at almost three quarters (73%) of financial services companies.

When asked for the key reasons that money laundering is rising up in their company agenda, respondents selected external risks (for example, the crisis in Russia and people trafficking) (64%), the increased focus on customer transparency and ethical customer onboarding (62%), and the increased risk of fines (51%), as the core reasons.

The survey also revealed that the growth of unethical business practices is the key reason that financial services professionals care about AML compliance (32%). This was followed by abhorrent crimes (e.g., people or drug trafficking, arms dealing, and terrorism funding), at 26%.

Although anti-money laundering is moving up the company agenda, many financial services companies are facing process and compliance challenges. The top two anti-money laundering weaknesses were identified as document collection for individuals and companies (e.g., passports and share registers) at 27%, and training staff on the latest anti-money laundering requirements at 29%.

However, even though many financial services organisations are facing challenges with anti-money laundering processes, and the majority have found an instance of money laundering over the past year, almost a quarter (23%) are considering cutting AML compliance budgets in light of the expected recession.

Simon Luke, UK country manager at First AML, commented: “Robust document collection processes and being up to date with the latest anti-money laundering regulations are essential for compliance in this area. So it’s shocking that AML budgets are being cut. Without the right processes in place, companies are not only at risk of fines, but also of letting dirty money pass through their organisations.

“Although financial services companies need to protect margins and ensure that they are maximising returns for investors, it’s surprising that this comes at the expense of doing the right thing. When respondents were asked their biggest challenges around working in the financial services sector, ‘keeping up with regulations’ was the highest at 61%. Businesses are under a lot of pressure but cutting anti-money laundering budgets isn’t the answer.”