Concern among UK banks and insurers regarding financial crime is reaching new levels, but institutions have little or no dedicated budget to fight it, according to research from IT services firm LogicaCMG.
The study of 100 senior executives reveals that only 17% of financial services institutions have a dedicated budget to combat financial crime, despite two thirds of respondents claiming that fraud issues are higher on the corporate agenda than ever before.
The report reveals a disparity between what firms feel should be done to contest financial crime and the investment that is actually being made. More than three quarters (79%) of financial institutions believe they are proactive in battling financial crime, yet only a quarter plan to increase budgets to tackle this growing problem.
LogicaCMG says this lack of budget, combined with a lack of analysis, is leading to a misdirection of resources dictated more by regulatory demands than bottom line business sense. The survey finds firms are focusing on combating money laundering (45 per cent see it as the key focus) rather than credit card (three per cent) and other types of fraud (27%).
Guy Warren, LogicaCM'’s managing director of financial services in the UK, comments: "It appears the industry has some way to go before understanding the impact of crime to the bottom line and subsequently, where it invests sufficient funds to seriously tackle the problem."