Bank boardrooms are devoting more time and space to fighting money laundering than at any period in recent times, a global survey says.

Bank boardrooms are more concerned about money laundering than they have ever been, according to a global survey by KPMG that comes at a time when a number of banks have been heavily fined over lapses and lax controls.

Some nine out of ten of senior financial executives (88 per cent) questioned for the accountancy and professional services firm’s Global Anti-Money Laundering Survey said money laundering issues are back at the top of their agenda. Some 317 anti-money laundering and compliance professionals in banks and financial institutions, across 48 countries were surveyed last November.

The majority suggest that the issue is no longer being squeezed by competing priorities, as has been the case in recent years (only 62 per cent focused on the issue in 2011). A majority of respondents (84 per cent) also said money laundering is now considered a major concern within their business risk assessment, further emphasising how seriously management teams are taking failures to meet regulatory requirements.

The fight against attempts to process dirty money has been an issue for policymakers for decades, ratcheting up after the 9/11 terrorist attacks on the US. A number of banks have been fined for AML control lapses or oversight failings, such as HSBC, Standard Chartered and Standard Bank. Some of the problems at the banks happened several years before they were punished; in many cases firms say they have bolstered controls since.  (For the latest survey of miscreants in the industry, click here.)

An issue is that as banks have battled to win a share of the emerging market pie as more developed economies have struggled in recent years, the temptation to turn a blind eye to “hot” money remains high. The issue is also a part of broader global pressure to crack down on secretive bank accounts in certain offshore jurisdictions.

“Anti-money laundering has never been higher on senior management’s agenda, with regulatory fines now running into billions, regulatory action becoming genuinely license threatening, and criminal prosecutions of firms and individuals becoming a reality,” Brian Dilley, global head of the anti-money laundering practice at KPMG, said in the firm’s report.

An issue of concern is that satisfaction with transaction monitoring systems is poor, as one in three senior executives (35 percent) say their system is neither efficient, nor effective, the report said.

Worse still, only just over half of respondents said their systems provide the complete picture by monitoring transactions across businesses and jurisdictions.

According to the report, accurate cost forecasting is vital for informed decision making, but remains a key area of weakness due in part to the number of regulatory change announcements and the speed in which new regulations are expected to be implemented.

The report said respondents want to see a consistent AML approach by regulators around the world; 84 per cent of them said the pace and impact of regulatory changes are a big challenge to how their banks operate.
The report also shows that outsourcing and off-shoring are growing trends. To date, 31 per cent of respondents had outsourced and 46 per cent had off-shored some of their anti-money laundering functions. This trend runs in spite of senior management concerns about a perceived lack of control and oversight, data confidentiality concerns or a lack of cost savings.