Allowing money laundering to take place sends a clear message to criminals: crime does pay, according to LexisNexis Risk Solutions. Drug trafficking, human trafficking, cybercrime, and terrorist financing are among the real-world human effects of failing to tackle money laundering across every part of the financial sector.
“Remember what we’re fighting for” is the message in a short video, produced to accompany three new reports that have been published by the legal, business, and risk intelligence company, under the banner ‘From the Frontline: Money Laundering Exposed’.
In the first, The UK’s Fight Against Money Laundering, produced in partnership with the Economist Intelligence Unit (EIU), LexisNexis has surveyed more than 200 professionals on the anti-money-laundering (AML) frontline to explore the barriers to combating illicit finance.
The report identifies an “internal culture of complacency” in the gambling sector as the biggest single problem facing AML professionals in the UK.
“The threat money laundering poses to the gambling sector is very real, and this fact is clearly recognised by those working within it too,” said Michael Harris, Director of Financial Crime Compliance and Reputational Risk at LexisNexis Risk Solutions.
“The industry needs to take urgent steps to address this growing threat by ensuring that customer due diligence checks are conducted before allowing any gambling activity to begin, and, given the rise in online gambling, should consider embracing digital know your customer [KYC] technologies.
“This, along with training those teams dealing with customers on the frontline to spot money laundering red flags and adopt a risk-based approach, gives gambling operators the best chance of fighting financial crime and meeting their legal obligations.”
The report also found that just under 42 percent of AML professionals believe that current UK regulations are only “somewhat effective” in fighting financial crime.
In the second report, FinTechs vs Money Laundering, over 60 AML professionals from the digital finance sector share their perspectives on putting AML controls at the heart of their businesses, without “the burden of complex legacy systems”.
Both reports find that cross-industry and stakeholder collaboration is critical to combating criminal finance within the industry.
The third report, ‘Facing the Threat’ presents a series of insights from UK AML experts in both the private and public sectors, identifying the barriers to information sharing. The report sets out what the respondents believe are conflicting legislative demands, along with a series of recommendations for improving Suspicious Activities Reports (SARs).
All three reports are available here.
Last month, the Law Commission recommended a number of changes to the UK’s SARs regime, saying that policymakers need to create standardised forms for financial companies to use and establish an advisory board to monitor emerging money laundering threats.
The Commission believes that authorities are collecting reams of information that is often of little use to the police and other agencies, leading to hundreds of thousands of SARs but few successful actions.
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