The FSA has announced the removal of its detailed rules on money laundering.
But leading anti-money laundering expert, Equifax, is warning that this change puts business executives of regulated companies even more in the spotlight on this crucial issue. This also follows publication of the Joint Money Laundering Steering Group's (JMLSG) new Guidance Notes on the Prevention of Money Laundering.
"The change in both the FSA guidelines and JMLSG Guidance Notes respond to the concerns those in the financial services sector have expressed for sometime that the anti-money laundering rules were too stringent and were impacting on business processes and customer service", said Sue Woods, Head of Equifax ID & Fraud Services. "But, as the FSA said itself, this doesn't mean the pressure is off. Indeed, we believe that this puts even more pressure on senior management of regulated companies to make sure their own anti-money laundering checks are sufficient."
Regulated firms have until August 2006 to put their own anti-money laundering process in place and Equifax is advising that online tools for checking individuals and businesses will provide important, streamlined, protection.
The JMLSG's latest Guidance Notes also stipulate the crucial need for reliable and easily accessible sources of independent data to verify identities. Indeed, the guidance notes advocate the use of electronic data sources which can provide a wide range of confirmatory material without involving the customer. Working in support of the JMLSG, Equifax has developed online solutions for checking both individuals and businesses and thereby reducing the reliance on the traditional methods of proving identity by use of documents.
"Traditionally banks, building societies and other financial institutions have asked customers to provide documentary evidence to "prove" their identity", continued Sue Woods. "This could be utility bills, banks statements, a passport, for example. But, as well as being time consuming to find these documents, they are easy to forge - so don't really do the job. We believe a more effective way to "prove" identity is to use online tools that access a variety of information sources. As well as providing an instant response for the business and the individual, it also provides what we believe is a more robust form of identity verification."
Equifax has developed a number of online solutions to support businesses and the industry to tackle money laundering, including AML Online which provides access to comprehensive and in-depth information on more than 1.6 million UK companies and their directors and over 45 million individuals in the UK.
"We are increasingly seeing a large number of regulated companies, both large international groups and smaller operations, completing identity checks using electronic methods. This streamlined, efficient approach to identity verification will be crucial as the onus increases on executives to ensure that money laundering is not happening in their business. The penalties for companies and their executives that do not have the right procedures to prevent money laundering are considerable, so better that they put the processes in place now to protect themselves."