Money laundering shoots to top of bank boardroom agenda

Money laundering shoots to top of bank boardroom Agenda

Majority of bankers surveyed rate money laundering as a major concern when assessing business risk.

Also on

  • 1 in 3 senior executives say transaction monitoring systems are neither efficient, nor effective
  • Almost half outsource or offshore anti-money laundering functions

Bank boardroom focus on money laundering is at an all time high, according to data released today by KPMG.

Nine out of ten of senior financial executives (88 percent) questioned for KPMG’s Global Anti-Money Laundering Survey said that money laundering issues are back at the top of the agenda in their organisation. The majority suggest that the issue is no longer being squeezed by competing priorities, as has been the case in recent years (only 62 percent focused on the issue in 2011). A majority of respondents (84 percent) also admitted that money laundering is now considered a major concern within their business risk assessment, further emphasising how seriously management teams are taking failures to meet regulatory requirements.

Brian Dilley, Global Head of the Anti-Money Laundering Practice at KPMG, commented: “Anti-money laundering has never been higher on senior management’s agenda, with regulatory fines now running into billions, regulatory action becoming genuinely license threatening, and criminal prosecutions of firms and individuals becoming a reality.”

Bill Michael, EMA Head of Financial Services at KPMG, added: “Financial institutions are making significant changes in response to increasingly far-reaching global anti-money laundering regulations: anti-money laundering is shifting from a standalone function under compliance, to an increasingly complex and overarching function cutting across legal, risk, operations and tax.”

Cost of compliance continues to be underestimated

Worryingly, satisfaction with transaction monitoring systems is poor, as one in three senior executives (35 percent) say their system is neither efficient, nor effective. Worse still, only just over half said their systems are able to provide the complete picture by monitoring transactions across businesses and jurisdictions.

According to the report, accurate cost forecasting is vital for informed decision making, but remains a key area of weakness due in part to the number of regulatory change announcements and the speed in which new regulations are expected to be implemented. The suggestion emerging from the data is that senior management is likely to continue to underestimate anti-money laundering expenditure, unless lessons are learnt from past mistakes.

Regulatory approach is fragmented and inconsistent

A consistent regulatory approach was cited by senior executives as the top anti-money laundering concern, with 84 percent of respondents indicating that the pace and impact of regulatory changes are significant challenges to their operations.

Dilley added“Despite annual expenditure that is estimated to reach billions over the next couple of years, institutions continue to risk falling foul of regulatory expectations, which seem to change more regularly than in the past. Trying to get away with doing ‘the minimum’ is not good enough – the only way to stay out of trouble is to meet the highest standards possible.”

The report also shows that outsourcing and off-shoring are growing trends. To date, 31 percent of respondents had outsourced and 46 percent had off-shored some of their anti-money laundering functions. This is despite senior management concerns regarding a perceived lack of control and oversight, data confidentiality concerns or a lack of cost savings.

Dilley concluded: “Despite some positive steps and evident strides in coming to grips with the 21st century challenges posed by money laundering threats, the risk of lagging behind today’s globally connected money launderers remains very real. It is essential that regulators implement a consistent regulatory approach, but also foster a closer working relationship with industry professionals in order to leverage each other’s resources, aligning mutual interests in order to ensure that money laundering doesn’t pay off.”

- ENDS -


For further information please contact:

Monica Fiumara, Senior PR Manager, KPMG

T: +44 (0)20 7694 5674

M: +44 (0)7901 105180


KPMG Press Office: 020 7694 8773


Notes to Editors:

About the Survey

Statistics are based on the views of 317 anti-money laundering and compliance professionals in banks and financial institutions, across 48 countries. Respondents views were obtained via an online questionnaire conducted during November 2013.

About the AML Network

Within KPMG, the AML network consists of over 350 professionals from around the world. KPMG has provided AML advisory assessments worldwide, and contributed to some of the largest AML investigations and program rehabilitations in recent history. Whether assisting a financial institution proactively seeking to improve its program or reactively responding to a regulatory order, we are able to provide services to address many manners of AML program improvement sought by the financial community in today’s marketplace.

About KPMG

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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