What are risks and challenges for preventing financial

A large majority (75%) of anti-money laundering (AML) professionals believe the current geopolitical landscape presents new risks and challenges for preventing financial crime at their organisations, according to a joint survey by SWIFT and Dow Jones Risk & Compliance.

To address these risks, more than half (54%) of respondents are planning to increase their investment in RegTech in the next three to five years, as the majority (59%) say technologyhas improved their company’s ability to tackle AML, KYC and sanctions requirements.

The annual survey – comprised of responses from more than 500 compliance and anti-money laundering professionals around the world – assesses the current regulatory environment and the impact of new regulation on international and regional banks’ compliance departments.

Joel Lange, Managing Director of Dow Jones Risk & Compliance, said: “The shifting geopolitical environment has created an additional layer of complexity for tackling financial crime around the world. As the political and economic landscape continues to impact international trade, data protection, and tax cooperation, the need for greater transparency and more effective information sharing across borders is more important than ever.”


Compliance Teams Struggle to Cope with Regulations

Asfinancial crime risks continue to evolve, increased regulatory expectations represent the greatest challenge (69%) for respondents, followed by concerns surrounding increased enforcement of current regulations (50%), and the need to understand regulation outside of their home jurisdiction (42%).

Specific regulations, such asthe OFAC andEU 50% Rules[1]as well as the FinCEN CDD Rule[2] (both new in 2017 survey), are cited by over 70% of respondents as contributing to increased workloads for compliance departments. More than half of respondents say FATCA[3] and the Fourth EU Money Laundering Directive[4] are regulations that add to existing workloads.

“Technology can play a key role in providing new and enhanced capabilities that strike a balance between preventing criminal activity, meeting regulatory requirements and containing costs,” said Paul Taylor, Directorof Compliance Services, SWIFT. “The most sophisticated financial crimecompliance solutions help mitigate risks and boost efficiency in several ways, from managing workloads to automating payments monitoring and reducingfalse positives, enabling compliance teams to focus on more strategic risk policy and financial crime prevention work.”

Khaled Moharem, Head of Middle East & North Africa, SWIFT, said:“As a regional financial hub, the UAE recently adopted enhanced regulations in anti-money laundering. Innovative technical solutions such as RegTech will help the financial community in the region mitigate the risks and implement the right compliance policies while aligning themselves with international practices.”

AML Concerns in Focus 

The survey found that the greatest AML-related challenge currently facing organisations is having enough trained staff (57%), followed by the reliance on outdated technology (48%).

Historically, most institutions manage their anti-fraud and AML activities separately; however the data shows an increase (66%) from last year (59%) of AML departments handling fraud detection and prevention. When it comes to managing fraud, risk data (90%) continues to be the most relevant source of information, followed by crime typologies (75%) and news (70%).

For more information and to view the full results of the survey, please visit:

[1]The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) issued the50 Percent Rule which provides guidance on companies dealing with entities owned 50 percent or more in the aggregate by more than one blocked person.

[2]Financial Crimes Enforcement Network’s (FinCEN) Customer Due Diligence Rule (CDD) provides a customer due diligence framework intended to promote a more level playing field across and within financial sectors.

[3]The Foreign Account Tax Compliance Act requires foreign entities to report on the foreign assets held by their U.S. account holders or be subject to withholding onwithholdable payments

[4]The Fourth EU Money Laundering Directive (AMLD-IV) requires European member states to update their respective money laundering laws and transpose the new requirements into local law by 26 June 2017.

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