September 23, 2024

We can’t repeat it enough: criminals that want to launder their dirty money will try and find the weakest point/location/currency/type of transaction as entry into the financial system. Regulating banks is not enough, so regulators expand their reach as can be seen by the recent plans from the EU to ensure football clubs get their AML act together, the announcement that (finally hopefully) the tier 2 legislation in Australia will become effective before the end of the year and who knows what’s next.

I remember a story – from someone implementing a new accounting solution for a chain of jewelers in Singapore – where in the dataconversion it became apparent that cash transactions of over half a million were quite regularly happening. According to the management of the shops, reporting was not needed because it was not an unusual transaction at all; it happened quite regularly.

That only goes to indicate that awareness on financial economic crime topics is – in many sectors – not even close to an adequate level. Most employees in traditional banks will understand the importance of AML/CFT but staff in other sectors in the financial system still have a long way to go.

That requirement for a change in attitude is also highlighted in this (sponsored) article on the wealth management industry in Singapore ( read the article  )

The article showcases what organisations need to do (and clearly are not doing now) to meet regulatory requirements. It also suggests that currently dirty money must be flowing into the system and that increased regulatory oversight will put revenues and profits under pressure.

That means that internal controls in many FIS and regulatory inspections are not effective and that awareness in the (wealth management) industry is clearly not at the level it should be.

All these are signs that the need for training, workshops and all-staff e-learnings is still growing. Dirty money is called dirty for a reason – we need to keep in mind that money that needs to be cleaned is generated from illegal trade in drugs, weapons, endangered species, from human trafficking, slavery or corruption. Activities that no person in his or her right mind wants to be involved in or wants to be connected to.

Rolf van der Pol