A majority of financial services professionals lack confidence in their anti-money-laundering (AML) procedures. Despite this, many AML budgets may be slashed as economic conditions worsen.
These are the troubling headlines in a new report by specialist provider FirstAML. It found that 57 percent of the 200 UK professionals surveyed only describe themselves as ‘somewhat confident’ in their AML procedures.
One reason may be that over half of respondents (52 percent) have identified a single instance of money laundering in the last year, while nearly one-quarter (23 percent) have found more than one.
It is likely that many fear others will come to light, or that financial crimes are going undetected, putting at risk the company’s reputation.
Unsurprisingly, AML initiatives are moving up the agenda at almost three-quarters (73 percent) of financial services companies.
External risks – for example, Russia’s invasion of Ukraine, and the related issues of oligarchs, sanctions, and people tracking – are primary concerns for 64 percent of professionals.
Sixty-two percent identified more local issues, such as the increased focus on customer transparency and ethical onboarding, while just over half (51 percent) cited the increased risk of fines.
Despite all this, the survey found that almost one-quarter of respondents (23 percent) are considering slashing their AML compliance budgets in light of the expected recession.
Economic conditions are weakening in many parts of the world, with a deep recession likely in the UK, alongside soaring inflation and energy prices.
Simon Luke, UK Country Manager at First AML, said: “Robust document collection processes and being up to date with the latest anti-money laundering regulations are essential for compliance in this area. So, it’s shocking that AML budgets are being cut.”