Earlier this year, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a $390 million penalty against Capital One for “willful” anti-money-laundering (AML) failures that happened during a period between 2008-2014. For compliance operators in the space, the action was a strong signal of rigorous enforcement, and perhaps a sign of increased pressures to come.
Compliance has always played a pivotal role across financial firms and banking institutions in an effort to pinpoint and mitigate various risks across communication channels, including market abuse, insider trading, spoofing, front-running, and even sexual harassment and racism. For decades, legacy vendors have been at the forefront of providing services to these institutions to flag and report any compliance and security breaches.
The area of financial crime management at banks is vast with scope encompassing customer due diligence, sanctions & screening, fraud prevention and AML compliance. Over the years the combination of technology & operations supporting this area has become mature and internal service provided include effective prediction and prevention of the movement
There are many elements of life that have been profoundly affected by the coronavirus pandemic. Some we will learn to live with, others will revert to how they were, and some we will embrace for the better. What’s certain is that we must adapt our stance in a world that is constantly changing.
Finding the perpetrators of crimes is a taxing task in terms of time and money; however, regulators require banks to comply with AML and KYC regulations or pay penalties. Data is key to uncovering the criminals who exploit banks for illicit purposes, but employing data to best advantage is easier said than done. Tools such as entity resolution and network analytics make the process much more trustworthy and less costly.
The Continued Struggle with Anti-Money-Laundering Compliance: Ongoing challenges and opportunities for financial institutions
Money laundering is an unfortunate reality for banks with the potential to not only put them in hot water with regulators but destroy their reputations as sound, above-board financial institutions. Data and technology are essential to unmask those villainous customers who use their financial firms’ systems for illicit gain. What are the key areas that bank managers must consider when developing strategies to combat this insidious threat to their businesses?
Money-laundering activities should have received a fatal blow from the scandals revealed in such documents as the Panama Papers, but recent events paint a different picture: the offshore finance industry and money laundering continue to be alive and well! Financial institutions that find AML compliance an escalating struggle are not alone, but the costs of non-compliance are even more taxing. It’s past time for banks to take a closer look at their client portfolios.