21 October 2017

Stockbrokers admit AML failings

01 April 2004  |  6175 views  |  0 cash - swag bag sterling

Almost half (44%) of the UK's top stockbrokers admit that their current anti-money laundering systems are leaving them exposed to the risk of fraud and compliance failure.

The study, commissioned by BT and GB Group - which have developed an online authentication service, URU - and carried out by Coleman Parkes, polled CEOs at 32 of the UK's top 70 stockbrokers.

Almost 70% of stockbrokers questioned still rely on manual systems to check transactions, over 40% say their current processes are time-consuming and in excess of a quarter say their existing systems are cumbersome. Over three quarters of stockbrokers also say they currently need to invest more in technology to meet the demands of the anti-money laundering regulations.

Peter Gandy, head of Web Services at BT Global Services, says: "Our research clearly highlights that a significant percentage of stockbrokers feel they are currently exposed to financial penalties by the FSA (Financial Services Authority) because their predominantly manual systems are too slow and unwieldy."

The problems are not confined to the stockbroking community. The FSA has written to 40 chief executives at some of the UK's biggest banks and insurance companies to warn them of inadequate internal reporting of AML activity. The watchdog believes that some reports fail to provide senior management with sufficient information to judge the adequacy of their anti-money laundering controls.

Both Bank of Scotland and Abbey National have recently fallen foul of the regulator and incurred stiff fines for failings in money laundering record-keeping and reporting.

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