Technology alone can't fight money laundering

Other factors like company culture, process and people are important in combating such financial crime, according to SAS executive.
Written by Lynn Tan @ Redhat, Contributor

Technology is only a piece of the larger framework that banks need to combat money laundering, said a senior executive of analytics software provider SAS.

In an interview with ZDNet Asia, Bill Lee, managing director of Singapore and emerging markets at SAS, said that anti-money laundering (AML) technology helps banks detect and report suspicious financial activities, but emphasized that the software alone does not offer total protection.

He explained that although analytics is at the heart and core of AML solutions, because it looks for patterns, "technology plays only a part in a successful AML kind of initiative".

Process and culture play a big part, too. "You don't just put a [technology] solution in place. That solution has to work hand-in-hand with the operations of the bank," he explained. "A proper process has to be put in place."

Sharing SAS' customer implementation experience, Lee said that putting a system in place and designing a process "are the easy parts". Changing the mindset of the financial institution and recruiting the right people for the job are the bigger challenges.

"I think one of the key challenges in Singapore and in many Asia-Pacific countries is the lack of professionals who actually understand what it takes to put such a system in place," Lee noted.

Although AML solutions have the capability "to flag out questionable transactions", Lee added, the system would still require manual input of designated parameters to highlight those transactions. "So you need professionals who understand what kind of parameters to put in there in the first place," he said.

Citing reports from KPMG, SAS Executive Director Don Cooper-Williams noted that banks are increasing their spending on AML. "[However], I think that the banks will be in error, in spending the money purely for compliance sake."

Cooper-Williams said that organizations will also need good governance to combat money laundering. "What we need to see is a culture of governance and transparency in the way they run their businesses," he said.

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