Polivec Survey Shows Financial Services Firms Struggle to Comply with Anti-Money-Laundering Regulations and Directives
Thursday, March 29, 2007
Mountain View, Calif., - March 29 2007 – Financial services firms that bear responsibility for preventing money laundering and identifying the criminals and organizations who traffic in illegal funds are having a tough time identifying and responding to the very compliance issues and regulations that are intended to help them.
That was the major finding of a recent survey by Polivec, Inc. specialists in compliance, governance, and risk management. The Mountain View, California firm polled more than 250 visitors to its booth at the 12th Annual Moneylaundering.com and Money Laundering Alert Conference in Hollywood, Florida March 19–21.
Polivec also found that 35 percent of conference attendees, who were primarily attorneys, corporate risk managers, and law enforcement professionals, consider anti-money-laundering (AML) the most important compliance activity for their organizations. Of those surveyed, 82 percent also felt that “know your employee” issues carry a significant degree of risk when it comes to complying with government regulations.“Attendees told us that financial institutions need timely information that alerts them when they are out of compliance, and gives them the reasons why. Only then can they take corrective action,” stated Polivec vice president Tom Grubb.
“For example, if an employee responsible for maintaining the OFAC (Office of Foreign Assets Control) list of individuals and organizations whose assets are blocked by various sanctions misses an update, you need to know immediately. Correcting that problem will put you back in compliance. More importantly, it may enable you to identify, and help law enforcement authorities track down, some sophisticated criminals.”Other findings in the survey showed that 21 percent of respondents cited a need to manage compliance on an integrated, enterprise-wide basis as their organization’s most significant AML challenge. But 22 percent stated that they have been successful in using technology for AML initiatives.
“Our survey gave us a good deal of insight into the pains and frustrations that financial services firms experience as they struggle to comply with government regulations and compliance directives,” said Polivec CEO Kim Nelson.
“I was particularly struck by the high risk rating that survey participants assigned to ’know-your-employee.’ That reinforces how important it is to have a firm handle on whether your people are performing all the tasks that are required to keep your business operating within the policies it sets. In other words, it’s not sufficient to have a comprehensive, well-written policy manual that would, if followed, keep your company in compliance. You’ve got to be absolutely sure that your people are, in fact, doing what the manual spells out.”