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Effective AML compliance is an enabler: LexisNexis

Nurdianah Md Nur | Feb. 26, 2015
An effective AML system enables FIs to onboard clients quickly and safely, reduce risks across their organisations, and gain a better understanding of their customers, says Chrisol Correia of LexisNexis.

Chrisol Correia, Director, Global Anti Money Laundering  for LexisNexis Risk Solutions
Chrisol Correia, Director, Global Anti Money Laundering for LexisNexis Risk Solutions.

The negative impact of money laundering on reputation, share prices and economic viability, as well as heightened regulatory scrutiny, are causing financial institutions (FIs) to increasingly invest in anti-money laundering (AML) solutions. According to KPMG, 78 percent of the 317 AML professionals surveyed globally reported an increase in their total investment for AML from 2011 to 2014. Nearly three quarters of them (74 percent) also predicted that their firms will further invest in AML solutions from 2014 to 2017.

In an exclusive interview, Chrisol Correia, director of Global Anti Money Laundering for LexisNexis Risk Solutions, talks about the evolution and benefits of AML measures, and how technology should be used to combat money laundering activities. 

How has AML measures evolved over the years? Is it affected by the increasing use of mobile banking/payment and cryptocurrencies?  
AML has evolved rapidly and dramatically over the years in response to the changes in the definition of AML, as well as the increased understanding of its negative societal impacts and how money laundering is in fact a function of counter terrorist financing and financial crime in its broader sense.

The first legal definitions of money laundering were often limited to proceeds of drug crime. That has changed over the years, so the definition has broadened in scope. Now, we have a very wide array of "predicate offences" that are defined as being precursors to money laundering. For instance, national governments and law enforcement agencies might sometimes find it is easier to prosecute and secure a conviction under money laundering laws rather than going through a complex process of fraud trial.

So we see money laundering laws being used more aggressively to prosecute criminals and terrorists. That has led to an increased prominence of the AML function within FIs and we have seen the sophistication and complexity of that technology change as concerns about AML increased. Perhaps years ago, it was a function of fraud department, and was maybe fairly limited in its ambition. But today, AML is seen as a distinct discipline or profession within a bank. It has the attention of the C-level executives, it is mentioned in annual reports to shareholders, and there is ongoing dialogue between FIs and regulators.

In the context of mobile banking payment and crypto-currencies, these are areas of interest to regulators. Sometimes, these activities aren't fully regulated within the financial services regulatory framework, or perhaps they are not yet being explicitly considered in AML laws. It's an area of concern because they are less regulated than other financial instruments. Banks are clearly viewing mobile banking payment technology as a growth opportunity.

 

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