The details matter when it comes to sensitive banking data, especially relating to payments. Regulators are clamping down on banks in response to the threats posed by ever-increasing criminal and terrorist activities and are requiring specific information about not only the sender but also the recipient of a payment; fortunately solutions exist in the form of MT structured message formats.
Many bank managers are grateful that they do not live and work in war-torn countries; but guess what, hardline terrorists are bringing the battle close to home. Within the current world climate, banks, small and large, have a responsibility to participate in the war against domestic terrorism by implementing vigorous anti-money-laundering/counter-terrorist-financing programs.
An ounce of prevention is worth a pound of cure, particularly in the sphere of AML-compliance in the banking industry. Yes, it is costly to establish an effective AML-control structure, but non-compliance costs can be much more taxing—so how do financial firms institute cultures of compliance throughout their operations that ultimately minimize risks to all parties involved and increase enterprise value?
Banks continue to unwittingly act as laundromats for dirty money, but hopefully never again on the same scale as the recent operation dubbed Laundromat, which saw billions of dollars pass from Russian sources through numerous banks around the world. Authorities are still working to unravel the tangled trail and uncover those who were complicit in carrying out the shockingly successful operation.
With the fourth EU Directive on Money Laundering coming into force in June this year and instances of financial crime becoming increasingly frequent, it is more crucial than ever for teams within Financial Institutions (FIs), as well as across the industry, to collaborate to tackle financial crime and fraud.
Banks and other financial institutions entered 2017 facing an increasingly daunting framework of anti-money-laundering (AML) laws and regulations. During the past several years, regulatory agencies have been aggressively stepping up their enforcement actions, and they’ve levied huge fines for compliance failures.
An entire industry – card payments acquiring and processing – relies its risk management methodology on chargebacks optimization as its main, if not sole, operational target.
With the US Department of Justice’s recent announcement that it plans to step up enforcement actions, financial institutions’ board members and senior managers may face increased scrutiny.
In recent years, U.S. authorities have increased their scrutiny of financial institutions’ anti-money laundering controls. In light of this development, banks and other institutions have begun to reassess perceived or actual AML risk across their operation.
In the past several years, the volume and monetary value of enforcement actions by the Office of Foreign Assets Control (OFAC) seem to have risen dramatically. In fact, civil penalties and settlements have grown from several million dollars in 2008 to billions of dollars in 2014.