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The Americas is the hardest region for banks to govern in terms of AML sanctions’ compliance and European banks are struggling to handle increased payment volumes that need to be scanned as regulators widen the net to include domestic as well as cross-border payments.

 

These are just some of the findings contained in technology service company’s Logica’s research into the challenges facing anti-money laundering (AML) experts in Europe and North and South America. Almost 90% of compliance professionals surveyed agreed that either increased regulatory demands or the rise of organised financial crime were the biggest challenges for banks in these regions.

 

In North and South America, more than half of respondents found increased regulatory demands a significant challenge. In Europe however, the most commonly cited challenge was the ambiguity of sanctions regulations,which 73% agreed or strongly agreed should be more straightforward.

 

More than 40% of European respondents also stated that the US Treasury's

Office of Foreign Assets Control (OFAC) bared the sharpest teeth when it came to AML regulation with 62% indicating they found the Americas the hardest region to govern in terms of sanctions compliance.

 

"What's interesting here is that so many compliance professionals in Europe are more concerned about OFAC than by their domestic regulators and the United Nations,” remarked John Evans, director of financial crime solutions, Logica. “It's clear that OFAC's wide geographical reach and heavy penalties are a continuing challenge for banks. Unfortunately, as domestic regulators clamp down further, the compliance headache - and potentially the regulatory ambiguity - looks set to remain a challenge."

 

The European survey results also highlighted that 30% of compliance professionals felt their bank could not scale effectively to handle foreign domestic payments traffic. "Clearly many banks are not equipped for what could be a vast increase in payments to scan.” Evans said the payments landscape was changing and simply filtering cross-border traffic would no longer suffice.

 

A key regional difference highlighted by the survey was concern over managing multiple sanctions’ lists. In North America, only 11% of respondents found this challenging, while in Europe, 28% cited this as an issue. Evans said large global banks may have up to 25 lists to manage.