Vertical Markets

Money laundering challenge

by Mark Rowe

Banks are unable to keep up with the 22 crimes defined by the European Union’s 6th Anti-Money Laundering Directive, notably human trafficking. That is according to the cyber arm of the defence firm BAE Systems – Applied Intelligence.

Peter Fisher, Financial Crimes Product Director, BAE Systems, said: “Money laundering is a challenge that goes way beyond financial risk and corporate reputation. Yet it is also shrouded in opacity. At this moment, criminals are rushing to take advantage of every opportunity to exploit gaps in the global financial system. They look for vulnerabilities in the industry’s defences – whether that’s environmental, jurisdictional, or technological – and it is the role of the financial institutions compliance professional to close these gaps as much as possible.”

In the study, a third (34pc) of UK financial institutions stated a lack of anti-money laundering support from law enforcement. BAE Systems found over a third (36pc) of financial services professionals aren’t confident in spotting signs of human trafficking in their customers’ transactions. A further 28pc have stated that financial crimes leading to human trafficking already account for significant financial losses for them.

A quarter (26pc) of financial institutions admitted to having to report and investigate criminal financial activity linked to human trafficking and some three-quarters (75pc) aren’t confident in their ability to identify human trafficking signs amongst transactions.

The state of money laundering – according to financial services professionals

– 89 per cent are concerned about money laundering
– 61pc admit it’s hard to uncover evidence of human trafficking through financial transactions
– one in three complain that too few suspicious activity reports result in justice
– Over half want to help protect society from financial crime
– One-in-five say they don’t have an anti-money laundering strategy in place
– 43pc agree they need better technology to help
– 44pc intend to invest in more people
– 72pc have had their AML approach impacted by COVID-19.

Visit: www.baesystems.com/GlobalStateofAML.

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