Global finance firms vow to fight financial crime

11 Jan 2008

Almost three-quarters of financial institutions surveyed by Irish technology firm Norkom have confirmed they are managing anti-money laundering (AML) in tandem with fighting other forms of financial crime.

The Norkom survey, conducted by Datamonitor, found 73pc are working to combat money laundering and more than half have achieved this on an enterprise-wide basis, embracing all geographies and business lines.

Almost half of the financial firms – some 47pc – say they have established financial intelligence units in order to overcome organisational barriers traditionally associated with enterprise-wide management and to centrally manage investigative resources.

A further 14pc plan to do so in the next 12 to 24 months.

“As we predicted, enterprise-wide financial crime management is now a reality in most major financial institutions, with those organisations seeing significant improvements in detection rates and cost reductions as a result,” says Norkom’s chief executive Paul Kerley.

“Organisations are now focusing their attention on successfully adopting a risk-based approach – not just for AML as the regulator requires – but for all areas of financial crime. And they expect these two new priorities to deliver even greater business benefits.”

The survey found that 87pc of institutions have experienced or expect to experience improvements in crime detection capability as a result of their enterprise-wide approach; 80pc say they’ve experienced or expect cost savings.

But 93pc agree the business benefits of a risk-based approach to customer due diligence and ongoing monitoring will be even greater.

“A risk based approach, in which the extent of monitoring attention given to an individual account or customer is directly commensurate with the degree of business risk they pose, is now a regulatory requirement within AML,” explains Kerley.

“But far-sighted organisations have recognised the potential for commercial benefit too, and will extend this approach to all areas of financial crime. Costs will reduce as detection accuracy and investigative efficiency improves.

“Customer responsiveness will also rise, since low-risk new business will be able to be brought onto book more quickly,” Kerley concluded.

By John Kennedy