Saturday, September 3, 2011

Fight Against Money Laundering -3



The directive strengthens the other hand the obligation to share information. The Financial Security Act of 2001 introduced the need for coordination among banking groups the fight against money laundering. This involves organizing the different entities of the group exchange of information necessary for monitoring the customer on a consolidated basis. With the third directive, banks will now have the opportunity to share information between groups and banking networks, institutions and even between non-group members, since they are subject to equivalent obligations.

Beyond measures of intra and intergroup, banks must comply with in 2008 a major European regulations, European harmonization of retail payments (SEPA - Single European Payment Area [6]). "Europeanization" of cash flows increases the need for more secure against the practices of money laundering or terrorist financing. In addition to a larger volume, banks will soon face severe regulatory constraints on compliance, security and traceability of financial flows.

The banks have already set up systems for monitoring and tracking capabilities including data collection (to detect and select unusual or suspicious transactions), but also reporting and archiving of tests conducted. Examination of the flow from the source of transactions, to verify the source of funds, is based on two main areas:

* Filtering: detecting the presence or absence in the black lists published by national and supranational regulation;
* And behavioral analysis: analysis of accounts and transactions in connection with the risk profiles to detect unusual transactions and suspicious behavior.

However, with the increasing internationalization of flows and extensive monitoring obligations to the beneficial owner of the transaction, major efforts are still needed to harmonize procedures for risk prevention (warning indicators adapted from the Know Your Customer rules, ... ) internationally. According to a KPMG study [7], although the expenses of banks in combating money laundering and terrorist financing have increased on average by 58% over the past three years, only 24% of international banks have at the moment of an effective system for monitoring transactions and accounts of the same customer across different countries ...

In conclusion, the successful implementation of the Directive is closely linked to be the ability of banks to develop a coordinated approach and a risk, for realism and efficiency.