Regulatory Demands and Ambiguity are Greatest AML Challenges, Finds Survey

A majority (87%) of compliance professionals agree that either increased regulatory demands or the rise of organised financial crime are the biggest anti-money laundering (AML) challenges for banks in Europe and North and South America, according to a survey by Logica, a business and technology service company. In North and South America, more than half of respondents found increased regulatory demands a significant challenge. In Europe, however, the most commonly cited challenge was the ambiguity of sanctions regulations, which 73% agreed or strongly agreed should be more straightforward.

Almost half (45%) of respondents from Europe also claimed that the US Treasury’s Office of Foreign Assets Control (OFAC) bared the sharpest teeth when it comes to AML regulation. Sixty-two percent found the Americas the hardest region to govern in terms of sanctions compliance.

John Evans, director of financial crime solutions at Logica, said: “What’s interesting here is that so many compliance professionals in Europe are more concerned about OFAC than by their domestic regulators and the UN It’s clear that OFAC’s wide geographical reach and heavy penalties are a continuing challenge for banks. Unfortunately, as domestic regulators clamp down further, the compliance headache – and potentially the regulatory ambiguity – looks set to remain a challenge.”

A key regional contrast highlighted by the Logica survey is concern over managing multiple sanctions lists. In North America, only 11% of respondents found this challenging. In Europe, on the other hand, 28% cited this as an issue.

Evans continued: “Banks focusing on North America probably only need to scan payments against the OFAC sanctions lists. Banks in Europe, however, are likely to have to factor in more sanctions lists, such as those from the EU, the UN and domestic ones. Large global banks may have up to 25 lists to manage, so it’s easy to understand why this is such an issue.”

The European survey results also highlighted that 30% of compliance professionals felt their bank could not scale effectively to handle foreign domestic payments traffic.


Related reading

New consumer banking head for Citi Asia Pacific