A large majority (75 per cent) of anti-money laundering (AML) professionals believe the current geopolitical landscape presents new risks and challenges for preventing financial crime at their organisations, according to a joint survey by SWIFT and Dow Jones Risk & Compliance.

To address these risks, more than half (54 per cent) of respondents are planning to increase their investment in RegTech in the next three to five years, as the majority (59 per cent) say technology has improved their company’s ability to tackle AML, KYC and sanctions requirements.  

The annual survey – comprised of responses from more than 500 compliance and anti-money laundering professionals around the world – assesses the current regulatory environment and the impact of new regulation on international and regional banks’ compliance departments.

Joel Lange, managing director of Dow Jones Risk & Compliance, said: “The shifting geopolitical environment has created an additional layer of complexity for tackling financial crime around the world. As the political and economic landscape continues to impact international trade, data protection, and tax cooperation, the need for greater transparency and more effective information sharing across borders is more important than ever.”

Compliance teams struggle to cope with regulations

As financial crime risks continue to evolve, increased regulatory expectations represent the greatest challenge (69 per cent) for respondents, followed by concerns surrounding increased enforcement of current regulations (50 per cent), and the need to understand regulation outside of their home jurisdiction (42 per cent).

Specific regulations, such as the OFAC and EU 50 per cent Rules as well as the FinCEN CDD Rule  (both new in 2017 survey), are cited by over 70 per cent of respondents as contributing to increased workloads for compliance departments. More than half of respondents say FATCA and the Fourth EU Money Laundering Directive  are regulations that add to existing workloads.

“Technology can play a key role in providing new and enhanced capabilities that strike a balance between preventing criminal activity, meeting regulatory requirements and containing costs,” said Paul Taylor, director of Compliance Services, SWIFT.

“The most sophisticated financial crime compliance solutions help mitigate risks and boost efficiency in several ways, from managing workloads to automating payments monitoring and reducing false positives, enabling compliance teams to focus on more strategic risk policy and financial crime prevention work.”

Khaled Moharem, head of Mena, SWIFT, said: “As a regional financial hub, the UAE recently adopted enhanced regulations in anti-money laundering. Innovative technical solutions such as RegTech will help the financial community in the region mitigate the risks and implement the right compliance policies while aligning themselves with international practices.”

AML concerns in focus

The survey found that the greatest AML-related challenge currently facing organisations is having enough trained staff (57 per cent), followed by the reliance on outdated technology (48 per cent).

Historically, most institutions manage their anti-fraud and AML activities separately; however the data shows an increase (66 per cent) from last year (59 per cent) of AML departments handling fraud detection and prevention. When it comes to managing fraud, risk data (90 per cent) continues to be the most relevant source of information, followed by crime typologies (75 per cent) and news (70 per cent).- TradeArabia News Service