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UK banks extend crackdown on money laundering

15 July 2002  |  3810 views  |  0 cash colour

Six major UK banks, Abbey National, Barclays, HBOS, HSBC, Lloyds TSB and The Royal Bank of Scotland Group, have agreed to extend their anti-money laundering activities to probe long-standing accounts for evidence of suspicious transactions.

The six banks have issued a "Statement of Principles for Fighting Crime and the Financing of Terrorism", under which, among other things, they will undertake an initiative to re-confirm the identity of their existing customer bases.

The banks say they will apply profiling techniques, filters and other risk-based analyses to assess potentially high and medium risks of customer porfolios which have never been subject to anti-money laundering checks. These customers may have escaped checking either because they opened accounts before the legal requirements were introduced in 1994 or when monitoring was not as rigorous as it is today.

The Statement of Principles issued by the banks also commits them to continuing to invest heavily in automated transactions monitoring systems and operational processes in a bid to enhance their ability to detect suspicious transactions and new money laundering techniques.

The move has been warmly welcomed by the UK's Financial Services Authority, which was closely involved in the development of the risk-based initiative.

Carol Sergeant, managing director of the FSA, says: "Know your customer is an important anti-money laundering control and this initiative will enable the banks to take the necessary steps to establish a consistent standard across all customers, irrespective of when the account was opened."

She continues: "It will be important for the major banks’ example to be followed more generally in the financial sector. The FSA intends to discuss both with individual firms and their associations proposals for taking this work forward on a similar basis. We will also consult later in the year about introducing a rule to ensure this issue is gripped by all firms and that high standards are in place across the whole financial services sector."

The UK's National Criminal Intelligence Service recently chided bankers attending an FSA conference for filing too many reports on suspicious account activity without any supporting evidence.

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