In the global war to combat money laundering, the financial services industry appears to be nearing a dangerous tipping point. The unprecedented amount of attention being paid to AML activities in boardrooms around the globe these days is due, in large part, to the increasingly harsh penalties being doled out to institutions deemed to run afoul of AML regulations – punishments that can include billion-dollar fines, banks being stripped of their operating licenses and threats of criminal prosecution against financial institutions and the executives who are paid to lead them.
While the goal of preventing or, at the very least, minimizing money laundering and terrorist financing is critically important, regulators must be attuned to the possibility that this growing de-risking backlash could end up creating more risk within the financial system.
First published by ACQ (www.acq5.com)
By Teresa Pesce, Global Head of Anti-Money Laundering Services.