As we’ve remarked in this space when discussing FATCA, AML compliance is now an international concern. Many financial institutions have at least a tangential relationship with business done overseas, so regulations made abroad have an effect on domestic interactions. In that spirit, organizations around the world are pursuing various AML and KYC regulations aimed at protecting themselves against fraudulent transactions and engendering consumer and government confidence.
However, despite wider-spread awareness of the importance of these issues, there is still some room to improve. A survey by professional services group KPMG found that curtailing money-laundering was a priority for nearly 90 percent of senior managers globally, up from just 61 percent a decade ago. However, 84 percent of those same managers found coping with regulations a burden, describing it as a “significant challenge” to their operations.
A big part of that challenge is the global nature of modern financial operations. According to KPMG, “regions that [have] many developing countries, such as Africa, the Middle East, and South America, [need] to take a more active approach to reduce their vulnerability to financial crimes.”
The issues in these areas filter out to institutions domestically, who need to find viable solutions to dealing with a complex financial landscape.
For many financial institutions, those solutions are technological. It’s no surprise that the prominence of AML software is rising in conjunction with this newfound focus on risk assessment and management: the sheer volume and diversity of modern transactions requires responsive and streamlined solutions. Simply put, these institutions can afford neither monitoring each transaction individually nor the steep price that a compliance failure might come with.
