Banks who invest in their Anti Money Laundering (AML) technology systems stand to gain first mover advantage in the wake of increasing oversight across the Asia-Pacific (APAC) region. That’s according to a new white paper from Wolters Kluwer which notes that AML has become the top regulatory priority for banks in the region.
The finance, risk and regulatory reporting technology company notes that events such as the theft by hackers from Bangladesh Central Bank and the fallout from the Panama papers, means that banks across the region now face a more tightly controlled AML environment. APAC banks are therefore advised to digest recent developments and prepare their technology functions for the consequent flurry of activity in AML regulation, Wolters Kluwer’s experts suggest.
“As Asia’s financial sector braces for the next AML-related scandal or regulatory move, we see several major trends unfolding in the near term,” notes Michael Thomas, senior advisor for APAC at Wolters Kluwer and one of the authors of the report. “One is the implementation of risk-based assessments of customers for signs of potential money laundering and terrorist financing, as well as assessments of tax compliance -- as AML and tax avoidance are increasingly linked in the eyes of regulators.”
To tackle the AML challenges, institutions are now advised to adopt a multi-track approach that combines technology, organizational change and the development of talent, Wolters Kluwer says. The significant increase in regulatory actions makes it commercially viable (as well as wise from a reputational point of view) for banks in the region to enhance existing disparate systems. Ideally they should be seamlessly connected and integrated with ongoing assessments and controls, Thomas notes in the paper.
“The most successful approaches to AML are a judicious balance of the human and the technical, and combine consistency of standards with a degree of flexibility that ensures they can respond to regulatory and institutional change. In the current context, a firm confident that it has no problematic customers is not enough,” Thomas adds. “Regulators, and increasingly the broader public, expect financial institutions to be able to demonstrate that their systems, processes and procedures meet the highest international standards. Only the organizations with this capability will avoid possible censure and reputational damage.”
Wolters Kluwer Governance, Risk & Compliance (GRC) is a division of Wolters Kluwer which provides legal, finance, risk and compliance professionals and small business owners with a broad spectrum of solutions, services and expertise needed to help manage myriad governance, risk and compliance needs in dynamic markets and regulatory environments. The division’s prominent brands include: AppOne®, AuthenticWeb™, Bankers Systems®, BizFilings®, Capital Changes, CASH Suite™, CT Corporation, CT Lien Solutions, Corsearch, GainsKeeper®, LegalVIEW®, OneSumX®, Passport®, TyMetrix® 360, Uniform Forms™, VMP® Mortgage Solutions and Wiz®.
Wolters Kluwer N.V. (AEX: WKL) is a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. Wolters Kluwer reported 2015 annual revenues of €4.2 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide.