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2004 |
2007 |
2011 |
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Priority for senior management |
AML was a relatively high priority within banks. 61 percent of respondents believed AML was a high profile issue for their senior management. |
Stronger senior management engagement in AML efforts. 71 percent of respondents stated that their board took an active interest in AML. |
Senior management interest has declined but remains quite high, with 62 percent of respondents citing AML as a high profile issue. |
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Cost of compliance
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The cost of AML compliance increased sharply. The average increase over the previous three years was 61 percent, with no respondents reporting a decrease in investment. |
AML costs grew beyond expectation.
Average costs grew 58 percent in the previous three years, compared to a prediction of 43 percent growth in 2004.
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Costs continue to rise, at an average rate of 45 percent, against a prediction of “over 40 percent” in 2007. The extent of cost rises is underestimated by many. |
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Politically exposed persons |
PEPs were not a key area of focus, with only 45 percent respondents performing enhanced due diligence on PEPs at account opening stage. |
There was more focus on PEPs. 81 percent of respondents performed enhanced due diligence on PEPs at account opening stage. |
PEPs are now an area of focus for almost all respondents, with 96 percent using PEP status as a risk factor and 88 percent monitoring PEPs on an ongoing basis. |
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Sanctions compliance |
Not covered in the survey. |
Sanctions compliance is now a major challenge and source of AML investment due to increased regulatory focus. However, 20 percent of banks did not have any procedures in place to update principal information for the purposes of sanctions compliance. |
Sanctions compliance remains a challenge, with client screening seen as the most difficult area. 74 percent of respondents identify all directors and controllers. Worryingly, only 50 percent use the new MT202COV SWIFT message. |
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Know your customer |
Banks increasingly understood the importance of AML compliance for existing and new customers. 74 percent of respondents remediated information gaps for existing customers, even if taken on before new KYC rules or guidance. |
Banks continue to use remediation programs to ‘backfill’ customer data. There was a slight but not significant increase in the number of banks engaged in a remediation program, with 77 percent of banks having a remedial plan in place. |
KYC information is refreshed by almost all institutions, but not consistently across regions. 93 percent of respondents have a program in place to remediate information gaps, but the approach varies greatly. FATCA is the greatest immediate KYC challenge. |
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Regulatory approach
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The regulatory AML burden was acceptable but the requirements could be more effective. 84 percent of respondents believed the burden to be acceptable, but 54 percent felt that it could be more effective. |
There was broad support for regulatory AML efforts, but also more to do. 93 percent of respondents thought the regulatory burden was either acceptable or should be increased, however 51 percent said it could be better focused. |
Regulators are active, but banks want more collaboration and information. 85 percent of banks feel that the overall level of regulatory burden is acceptable, but many wanted more guidance and a collaborative approach. |
