24 August 2017
Visit http://response.ncr.com

New York state watchdog sets sights on bank money laundering systems

25 February 2015  |  6753 views  |  0 Wall street sign

The New York State Department of Financial Services (DFS) is planning to step up the fight against money laundering by carrying out random audits of Wall Street banks' transaction monitoring and filtering systems.

In a speech at Columbia Law School, Superintendent Benjamin Lawsky questioned the effectiveness of monitoring and filtering systems used by banks to flag suspicious transactions that could benefit terrorists, drug dealers and other criminals.

Lawsky told his audience that when the DFS ran transactions from a major bank through its own filtering system it found that the firm failed to flag millions of suspicious transactions. Subsequently, a "significant enforcement action" was brought against the bank, which Lawsky did not name but is understood to be Standard Chartered.

The superintendent now wants to do a similar thing with banks that are not already under suspicion, arguing "we believe there are likely widespread problems with transaction monitoring and filtering systems throughout the industry".

The regulator is "considering random audits of our regulated firms’ transaction monitoring and filtering systems, employing the same methodology our independent monitor used to spot deficiencies".

In addition, "since we cannot simultaneously audit every institution, we are also considering making senior executives personally attest to the adequacy and robustness of those systems".

During his speech, Lawsky also reaffirmed his commitment to plans for cyber-security assessments at banks that will cover protocols for the detection of cyber breaches, corporate governance, defences against breaches, and the security of third-party vendors.

Justifying the tough new stance, he told his audience that "we are concerned that within the next decade (or perhaps sooner) we will experience an Armageddon-type cyber event that causes a significant disruption in the financial system for a period of time - what some have termed a 'cyber 9/11.'"

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

New York regulator probes Wall Street cyber-security

New York regulator probes Wall Street cyber-security

10 December 2014  |  7678 views  |  1 comments | 6 tweets | 5 linkedin
PwC fined $25m for whitewashing bank's sanctions violations

PwC fined $25m for whitewashing bank's sanctions violations

19 August 2014  |  6320 views  |  0 comments | 7 tweets | 10 linkedin
Money laundering shooting up agenda but banks raise concerns over systems

Money laundering shooting up agenda but banks raise concerns over systems

29 January 2014  |  8865 views  |  0 comments | 15 tweets | 17 linkedin
HSBC compliance head quits at US hearing

HSBC compliance head quits at US hearing

18 July 2012  |  6437 views  |  0 comments
FSA fines Coutts £8.75m over AML failings

FSA fines Coutts £8.75m over AML failings

26 March 2012  |  9212 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit www.vasco.comvisit www.dorsum.eudownload the paper now

Top topics

Most viewed Most shared
Rabobank constructs physical model to understand IT architectureRabobank constructs physical model to unde...
22348 views comments | 47 tweets | 90 linkedin
Barclays pairs banking data with third party apps for SmartBusiness DashboardBarclays pairs banking data with third par...
12170 views comments | 22 tweets | 35 linkedin
Australia regulates digital currenciesAustralia regulates digital currencies
11653 views comments | 21 tweets | 35 linkedin
RBS to bring Silicon Valley to EdinburghRBS to bring Silicon Valley to Edinburgh
11383 views comments | 10 tweets | 8 linkedin
hands typing furiouslyWhy Is Risk Analytics Important?
10964 views 0 | 7 tweets | 1 linkedin

Featured job

Find your next job