technology spending but one area they should not contemplate
skimping on is anti-money laundering (AML), warns UK-based SWIFT
messaging software and data services specialist SMA Financial
(SMAF).
Quite simply, stressed SMAF, for banks that
trade across international, legal and financial jurisdictions,
benefits to be gained from having adequate AML processes far
outweigh the financial and reputational costs involved.
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SMAF warned that the UK’s Financial Services
Authority (FSA) routinely fines compliance officers and money
laundering risk officers as well as holding company directors
responsible for lack of adequate AML and risk controls.
“The regulatory fines that have been handed
out by the various financial authorities clearly show banks cannot
afford to make cut backs in this vital area,” said SMAF MD Simon
Murby.
Jonathan Pell, CEO of UK data quality
management specialist Datanomic, reinforced Murby’s point.
“We are starting to see the FSA show its teeth
and impose hefty fines against companies who fail to implement the
proper screening systems and controls against anti-money
laundering,” said Pell.
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By GlobalDataIndeed, in January, the FSA fined insurance
broking company Aon £5.25 million ($7.4 million) – its largest ever
financial crime-related fine. According to the FSA, Aon “failed to
take reasonable care to establish and maintain effective systems
and controls to counter the risks of bribery and corruption
associated with making payments to overseas firms and
individuals”.
Companies elsewhere in the world are also
under pressure from regulators to ensure AML vigilance. For
example, in January, the US Financial Industry Regulatory Authority
fined E*Trade Securities $1 million for failing to establish and
implement AML policies and procedures. E*Trade offers brokerage
services in six international markets.
The largest-ever penalty for violating AML
rules – $ 15 million – was paid to the US government by
California-based money transfer business Sigue in January 2008.
