Asia has greatest increase in money laundering: Research

A survey of top money laundering compliance officers identifies Asia as the region that has experienced the greatest increase in money laundering risk.

The findings also reveal that trade finance is the next major area of expected regulatory focus. While retail banking represents the area of most financial crime activity, said the study.

The survey, conducted by US firm Fortent, identified key areas of concern among executives, who are responsible for overseeing their institutions' compliance with anti-money laundering laws.

Key findings of the survey include:

• 30% of respondents, at institutions with global operations, identified Asia as the region experiencing the biggest increase in money laundering risk.

• Trade finance and beneficial ownership identified as top areas of expected regulatory interest over next 5 years.

• Private banking and electronic cash systems were identified as hot areas to watch over the next 3 years

󈬬% of respondents expect criminal activity to increase. This expectation, coupled with their observations about money laundering's growth in Asia, means that banks need to ensure that they have effective and efficient anti-money laundering programs in place

George Faux, group executive, client relationship management, at Fortent

• 71% of respondents cite retail banking as the line of business most sensitive to money laundering risk

• Nearly two-thirds of respondents expect attempts at criminal activity to increase over the next year - The trend was seen as related to the economic slowdown: "As the economy weakens, people get more willing to bend or break the rules," one respondent remarked. Also cited was an expectation of an increase in "mortgage-related suspicious activity."

• 65% expect their institutions to commit more resources to monitoring and detection over the next two years

• Budgetary limitations are the biggest obstacle to increasing financial crime-fighting efforts within institutions

George Faux, group executive, client relationship management, at Fortent, said: "The information generated from a diverse group of global financial institutions clearly demonstrates that there are significant concerns - not the least of which is that more than 60% of respondents expect criminal activity to increase. This expectation, coupled with their observations about money laundering's growth in Asia, means that banks need to ensure that they have effective and efficient anti-money laundering programs in place - in all regions of their operations and across lines of business."

Senior executives from twenty-one global, national, and regional financial institutions participated in the survey, including banks based in the United States, as well as overseas, with asset size ranging from $25bn to more than $1trillion.