Financial institutional spending in the US on anti-money laundering (AML) technologies will more than double from 2001 to 2002, following the late 2001 enactment of the USA Patriot Act, according to new research from TowerGroup.
Enacted on October 25, 2001, the USA Patriot Act introduced the most comprehensive anti-money laundering requirements for US financial institutions since the Bank Secrecy Act of 1970, says TowerGroup.
A new report from the global payments service of TowerGroup predicts the number and scope of the proposed regulations - particularly the increased "know your customer" requirements relative to account opening, ownership and usage patterns - will make manual compliance difficult for most institutions.
The need for greater automation of the compliance process will drive investment in AML technologies well into 2003, especially among large banks and securities firms, believes TowerGroup, estimating a fifteen per cent spending growth from 2002 to 2003.
The research firm expects spending by US banking institutions on anti-money laundering and related technology to reach at least $60 million by the close of 2002, with total financial services industry spending likely to be double that figure.
Three major types of products to combat money laundering are now being presented to the market: record-keeping and reporting products; rules-based products; and intelligent systems.