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Money laundering biggest fear for finance industry. Money laundering predicted to overtake fraudulent claims within two years

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17 November 2003
Concern regarding financial crime is growing to unprecedented levels amongst UK financial institutions, according to research announced by LogicaCMG today. Preliminary findings from a Coleman-Parkes survey commissioned by LogicaCMG, reveals that financial crime is high on the corporate agenda, with almost half (45 per cent) citing money laundering as their greatest focus.

Fraudulent claims were considered the greatest risk to financial institutions in the last two years, with 30 per cent (almost one third) of companies viewing this as the greatest cause of losses, followed by money laundering (26 per cent), internal fraud (17 per cent), card-based crime (12 per cent) and tax evasion (10 per cent). This trend however, is dramatically changing.

In the next two years, money laundering will overtake fraud to become the most prevalent type of crime, with 29 per cent of companies expecting this to be their greatest issue, followed by fraudulent crime (24 per cent). In addition, tax evasion (13 per cent) is anticipated to surpass card-based crime (10 per cent).

Money laundering has risen to the top of the corporate agenda because of firms’ fear of not meeting the regulations, such as the Financial Services Authority directives on anti money laundering first announced in August 2003. Almost half of those surveyed see this as the most important driver in fighting financial crime today.

Commenting on the findings, Guy Warren, LogicaCMG’s managing director of financial services in the UK, said: "This research shows there are significant attitudinal changes towards financial crime across all sectors of the industry. Although the survey demonstrates that an understanding of financial crime issues and solutions is improving, most institutions still appear to be merely pandering to the regulator, which sadly remains the main proponent in addressing crime. The entire industry must realise that financial crime needs to be understood, analysed and then fought proactively – the only effective way to do this is for the industry to join together and take a holistic approach to counter the criminals."

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