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Banks voice concern at evolving crime and poor enforcement

Despite spending billions of pounds of anti-money laundering (AML) compliance, banks are struggling to keep up with the changing nature of financial crime. A report – Future Financial Crime Risks – by LexisNexis Risk Solutions has found that some of the biggest UK banks spend as much as £660m each year on AML compliance but are concerned about their ability to effectively combat emerging risks.

Fourth EU AML Directive called into doubt

The report, produced with support from the British Bankers Association (BBA) brings into question the effectiveness of the Fourth EU AML Directive, with fewer than one in five (17%) expecting it to have a dramatic effect. Almost one-third (32%) of respondents said it will have no effect or could even increase levels of money laundering across Europe.

As well as the increasing regulatory burden, the report also highlights difficulties for compliance professionals, including their increasing personal liability and a shortage of AML compliance professionals in the UK. Half (50%) the compliance professionals in the study said the Senior Managers Regime would make their jobs more or a lot more stressful.

Chrisol Correia, director, Global AML Compliance, LexisNexis Risk Solutions said: “British banks are on the front line in the battle against financial crime. Both the nature of their business and regulatory design has positioned them as the first line of defence against money laundering, terrorism funding, and an expanding array of other illicit activities. Speaking to those who dedicate their careers to tackling financial crime reveals genuine fears about the ability of banks to continue to perform this function in the future, however.”

Too much regulation, inadequate enforcement

The survey also revealed the following key findings:

  • 61% of banking and financial services professionals say there is enough or too much regulation, but inadequate enforcement;
  • in light of the increased personal liabilities, 54% of compliance professionals would choose another career path if they had the opportunity; and
  • evolving criminal methodologies are currently the single biggest financial crime risk, according to 42% of banking and financial services professionals.

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Bank Relations & KYC
Evaluating Banks’ Overall Performance
Operations
Control & Compliance in Operations

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