24 March 2017
visit http://events.sap.com/gb/fsi-forum-2017/en/home

The Clearing House calls for overhaul of AML practices

17 February 2017  |  5174 views  |  0 cash

US bank lobby group The Clearing House has called for an overhaul of how its members deal with AML requirements, arguing that they should spend less time and money on submitting suspicious activity reports and instead concentrate on using more innovative methods to thwart money laundering and terrorist financing.

In a report based on feedback from bankers, fintech CEOs, law enforcement staffers and lawyers, the trade association says that, between them, big banks currently spend billions of dollars a year on AML compliance and that much of this is of limited benefit to authorities.

The report says that much more should be done by the US Treasury Financial Crimes Enforcement Network (FinCEN), which should also reclaim sole supervisory authority in money laundering from a host of different agencies.

Currently, banks are required to send FinCEN suspicious activity reports (SARs). These often require significant time and energy from bank staff, yet many of them "may never be read", says the report.

The FinCEN e-filing system needs an overhaul, according to the authors, with banks simply sending raw data, something which technology now allows the regulator to parse while maintaining privacy.

This would free up resources at the banks for work at their 'financial intelligence units' (FIUs). Often staffed by ex-law enforcement officials, FIUs are being set up by banks to develop new methods to tackle money laundering.

These units should be given "latitude" by regulators to operate outside the compliance regime in a sandbox, giving them the ability to evaluate client relationships and adapt in real-time to developing threats, says the report.

Read the full report (PDF)

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

Western Union to pay $586m to settle AML charges

Western Union to pay $586m to settle AML charges

19 January 2017  |  5690 views  |  2 comments | 7 tweets | 20 linkedin
EU tightens money laundering controls

EU tightens money laundering controls

03 February 2016  |  9727 views  |  4 comments | 18 tweets | 19 linkedin
New York state watchdog sets sights on bank money laundering systems

New York state watchdog sets sights on bank money laundering systems

25 February 2015  |  6321 views  |  0 comments | 10 tweets | 7 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  |  7357 views  |  0 comments | 15 tweets | 17 linkedin

Related blogs

Create a blog about this story (membership required)
Participate in the surveyVisit capgemini.comvisit abe-eba.eu

Who is commenting?

Top topics

Most viewed Most shared
Bank of England sets up fintech Community; runs blockchain and AI trialsBank of England sets up fintech Community;...
16569 views comments | 33 tweets | 26 linkedin
French retailer Carrefour launches online bank accountFrench retailer Carrefour launches online...
13830 views comments | 15 tweets | 33 linkedin
hands typing furiouslyMachine Learning: Lessons for Banks From S...
10246 views 0 | 12 tweets | 11 linkedin
Can banks really win in the payments business of the future? – new Finextra reportCan banks really win in the payments busin...
7784 views comments | 23 tweets | 36 linkedin
satellite26 Japanese banks register for Exchange-ru...
7562 views comments | 2 tweets | 1 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job