Financial Institutions are making significant changes in response to regulatory action and increasingly far-reaching global AML regulations; with numerous new regulations across Asia, the U.S. Foreign Account Tax Compliance Act (FATCA) having an impact, and the Fourth European Money Laundering Directive (4MLD) still to come.

These initiatives have quickly changed the AML scene from a standalone function under compliance, to an increasingly complex and overarching function cutting across legal, risk, operations and tax. Strong AML processes and controls are at the heart of inter-dependencies and linkages within a global organization, offering invaluable client knowledge that is only recently starting to be leveraged by other departments as well as senior management. But questions are now being asked as to whether it is possible for a global institution to run a fully compliant AML program.

Despite annual expenditure that is likely to exceed US$10bn in the next couple of years, institutions continue to fall foul of regulatory expectations, which seem to change more regularly than in the past. Minimum compliance with regulatory obligations is no longer enough to stay out of trouble, when you strive to meet a higher standard, but fail.

This survey not only compares firms’ AML programs over the period covered by previous KPMG survey’s but also looks at emerging areas of risk, such as Trade Finance and Tax Evasion, as well as looking at AML trends within the Insurance and Asset Management sectors. The latter sectors have received relatively less focus from regulators, but that is now changing as regulators broaden their purview.

KPMG                            January 29, 2014