Front line on laundering

Illustration: Keri Smith

Banks are doing their part to hamper the US$500 billion to US$1 trillion criminals launder worldwide annually, according to KPMG’s 2004 global anti-money laundering survey.

Of the 209 financial institutions polled, two-thirds filed a greater number of suspicious activity reports to law enforcement officials over the past three years due to improvements in their detecting and reporting systems. In addition, 83% are investing an average of 61% more to stop money laundering and expect spending to increase up to 40% over the next three years.

“Naturally, since 9/11 financial institutions around the world and Canada are stepping up to the plate and have become more vigilant than ever in the battle against money laundering,” says Jim Hunter, president of KPMG forensic.

For example, banks are increasing the sophistication of their monitoring methodologies — more than 40% of respondents have implemented external monitoring software. Furthermore, banks are investing in face-to-face training for employees to help them identify suspicious activities and monitor client accounts.

But the banks’ efforts are limited by their ability to monitor account transactions across territories and in other countries — one quarter of respondents admit they could not do so. In addition, respondents say law enforcement officials are having difficulty responding to the increased volume of suspicious transactions due to a lack of resources.

“Our Canadian banks are well aware of both the risk and the crucial role they play in detecting, reporting and putting a stop to money laundering activities,” says Hunter. “The next challenge will be improving the network of communication between law enforcement officials and the banks on a global level, to thwart the collusion between money launderers, terrorists and criminals.”