Wolters Kluwer Discusses the Impact of AML Regulations on APAC Banks

  • Payments , Regulatory Standards , AML and KYC
  • 07.07.2016 11:15 am

Anti Money Laundering (AML) has arguably become the top regulatory priority for banks in Asia Pacific (APAC), according to a new white paper from Wolters Kluwer. And banks should now be digesting recent developments to prepare their IT functions for the consequent flurry of activity in AML regulation. 

The finance, risk and regulatory reporting technology firm notes that events, such as theft by hackers of funds from Bangladesh Central Bank, means that banks across APAC are now operating in a more tightly controlled AML environment.

What’s more, the rapid ramp-up in action against AML control failures demonstrates the determination with which Asian regulators are now approaching the fight against money laundering and terrorist financing. This will inevitably result in a widening of AML legislation in markets where it is

relatively undeveloped, such as the Philippines. At the same time, however, investment destinations with more established regulatory regimes, such as Singapore and Australia, are likely to increase their oversight of wealth management activity and the flow of funds from overseas into assets

like real estate.

A global study published in December 2015 by the Association of Certified Anti-Money Laundering Specialists (ACAMS) found that 70% of institutions surveyed had increased AML staffing over the past three years, and most were planning to boost AML investment by double-digit percentages in the next three years. Respondents named rising regulatory requirements and changing regulatory expectations as the top operational challenges organizations faced in complying with AML regulations, Wolters Kluwer notes in its paper.

“Not surprisingly, many financial institutions are struggling to digest recent developments and prepare for the consequent increase in AML regulation,” says Michael Thomas, senior adviser at Wolters Kluwer, covering APAC AML. “To tackle this challenge, institutions will need to adopt an approach that combines technology, as well as organizational change and the development of talent.”

In fact, the increase in regulatory actions and the size of the possible penalties makes it commercially viable for banks in the region to enhance existing disparate systems so they are seamlessly connected and integrated with ongoing assessments and controls, Thomas notes in the paper.

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