Indian Banks to Increase AML Investment

Over three-quarters of banks and other financial institutions in India are planning to ramp up their investment in anti-money laundering (AML) systems, according to a new report from professional services firm KPMG.

The AML Survey 2009 found that 76% of the 2,000-plus institutions questioned said they would increase spending on AML compliance over the next three years.

KPMG said that although 70% of financial sector organisations said they have an effective system in place for monitoring suspicious transactions, it remains one of the top priorities for further investment, along with the introduction of automated AML solutions.

The survey also found that:

  • 79% of the respondents find the overall level of burden placed upon them by AML compliance acceptable. In addition, 34% of the respondents felt that the AML regulations need to be more focused and another 21 percent were for a?risk-based approach. Organisations advocate a risk-based approach to AML regulations as they believe regulations should be comparable to risk.
  • Senior management play an active part in AML compliance. Almost 67% of the respondents said that their senior management took an active role and another 33% said that they took some interest in AML compliance. AML compliance remains a high profile issue for the senior management of financial institutions in India as they are held directly accountable by shareholders and regulators for the full range of risks run by their institutions.
  • 88% of the respondents said that they have adopted a risk-based approach to know your customer (KYC) and another 8% stated that they are actively considering it.


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