BY Fraser Tennant
In a shot across the bows for the UK financial services (FS) sector, a new survey has revealed that over half of FS professionals are only “somewhat confident” in their firm’s anti-money laundering (AML) practices.
In its ‘FAML Financial Services Survey’ report, which surveyed 200 FS professionals across the UK, First AML reveals that 52 percent of respondents identified an instance of money laundering in the last year, with 23 percent identifying more than one.
Respondents also selected external risks, such as the crisis in Ukraine, people trafficking, the increased focus on customer transparency and ethical customer onboarding, as well as the increased risk of fines, as key reasons why money laundering is rising up their company’s agenda.
However, although AML is moving up the agenda, many FS companies are still facing process and compliance challenges, with the top two AML weaknesses identified as document collection for individuals and companies, including passports and share registers at 27 percent, and training staff on the latest anti-money laundering requirements at 29 percent.
Despite this, even though many financial services organisations are facing challenges with AML processes, and the majority have found an instance of money laundering over the past year, almost a quarter (23 percent) are considering cutting AML compliance budgets in light of the expected recession.
“Robust document collection processes and being up to date with the latest AML regulations are essential for compliance in this area,” said Simon Luke, UK country manager at First AML. “So it is shocking that AML budgets are being cut. Without the right processes in place, companies are not only at risk of fines, but also of letting dirty money pass through their organisations.”
In terms of business priorities, respondents selected maximising returns for investors as the top priority, followed by environmental, social and governance (ESG) and improving their bottom line.
The survey also revealed that the growth of unethical business practices is the key reason that financial services professionals care about AML compliance. This was followed by abhorrent crimes, such as drug trafficking, arms dealing and terrorism funding.