Banks' anti-money laundering costs jump - study
LONDON, July 9 (Reuters) - Spending by banks to combat money laundering has jumped almost 60 percent in the last three years and tackling crime is taking up an increasing amount of senior executives' time, according to a global survey. Anti-money laundering costs have risen more than banks had predicted as they face greater involvement in emerging markets and greater complexity of financial markets, the survey by KPMG showed.
Financial regulators are attempting to clamp down on over $1 trillion estimated to be laundered each year by drug dealers, arms traffickers and other criminals.
KPMG Forensic's survey of 224 banks in 55 countries showed their spending on anti-money laundering (AML) systems and processes has risen by an average of 58 percent over the last three years.
In North America and in the Middle East and Africa, spending rose by 70 percent or more.
KPMG said banks had predicted in a study in 2004 that costs would rise 43 percent over the three years. Now, banks predict an average increase of 34 percent over the next three years.
The biggest spending continues to be on transaction monitoring and staff training costs.
Over 70 percent of the banks said the number of suspicious activity reports (SARs) being generated had increased, including 42 percent saying the rise had been "substantial".
The survey showed 71 percent of directors at the highest level are actively involved in anti-money laundering issues, up from 61 percent in 2004.
Banks said there was concern anti-money laundering regulation needs to be more effectively targeted, with half of respondents saying that while the overall regulatory burden is acceptable, the requirements need to be better focused.
((Reporting by Steve Slater; editing by Sue Thomas/Rory Channing
Reuters Messaging:
rm://steve.slater.reuters.com@reuters.net
E-mail: steve.slater@reuters.com
Telephone: +44 207 542 4367)) Keywords: MONEY LAUNDERING COSTS/SURVEY
(C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nL06786738
