IT cuts should not compromise Anti Money Laundering compliance

by Gill Montia

Story link: IT cuts should not compromise Anti Money Laundering compliance

SMA Financial, which provides specialist back-office and consultancy services to the financial sector, is urging financial institutions that are cutting IT budgets not to compromise their Anti Money Laundering (AML) compliance.

According to SMA, AML software can protect banks from regulatory fines and damage to reputation and firms should therefore remain vigilant over the threat of money laundering, despite the distractions of the global financial turmoil.

The company is aware that many banks are considering a cut in spending on technology projects but warns that the benefits of having adequate AML systems in place outweigh the costs involved.

SMA also argues that effective systems for AML compliance and reporting are essential for any company using the SWIFT network within its payments operations.

In October of last year, the Financial Services Authority handed down a £17,500 fine to the money laundering reporting officer of London-base corporate advisory firm, Sindicatum Holdings Limited.

The regulator said the officer in question did not have adequate systems and controls in place for verifying and recording clients’ identities.

Only this month, insurer Aon was fined a staggering £5.25 million for failing to take reasonable care to establish and maintain effective systems to counter the risks of bribery and corruption associated with making payments to overseas firms and individuals.