Half of UK finance houses handle dirty cash

Powered by SC Magazine
 

Convicted criminals and suspected terrorists are laundering money through UK financial services companies because most banks fail adequately to screen customer databases, according to survey by data integrity specialists Datanomic.

The research reviewed 300 million customer records and uncovered instances of suspected terrorists, known drug dealers and fraudsters laundering money through UK financial institutions using aliases, joint accounts or associate names.

It is an offence under the Prevention of Terrorism Act 2005, the Terrorism Act 2000 and the Proceeds of Crime Act 2002 for firms to be involved in transactions that are the proceeds of crime, or are intended for terrorist groups.

Datanomic believes that up to half of UK financial institutions are already unknowingly in breach of this legislation. 

Adding to the legislative burden, the third European Union Money Laundering Directive (PDF) comes into force on 15 December 2007.

The directive requires financial services organisations to fortify their systems against money laundering by criminal gangs, known terrorists and others whose activities may compromise foreign policy or national security. 

Datanomic's audits typically reveal that around four per cent of an organisation's customers can be found on World-Check's Watch & Politically Exposed Persons List, and a quarter of these relate to financial crime.

For example, a recent review of 30 percent of customer data from a large London-based investment house resulted in seven Suspicious Activity Reports. 

Datanomic believes that financial services companies are sidetracked from spotting criminals by dealing with false positives produced by ineffective matching of their customer records with lists of known or suspected criminals and Politically Exposed Persons.

Copyright ©v3.co.uk


Half of UK finance houses handle dirty cash
 
 
 
Top Stories
Meet FABACUS, Westpac's first computer
GE225 operators celebrate gold anniversary.
 
NSW Govt gets ready to throw out the floppy disks
[Opinion] Dominic Perrottet says its time for government to catch up.
 
iiNet facing new copyright battle with Hollywood
Fighting to protect customer details.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest Comments
Polls
In which area is your IT shop hiring the most staff?




   |   View results
IT security and risk
  26%
 
Sourcing and strategy
  12%
 
IT infrastructure (servers, storage, networking)
  21%
 
End user computing (desktops, mobiles, apps)
  15%
 
Software development
  26%
TOTAL VOTES: 337

Vote
Would your InfoSec team be prepared to share threat data with the Australian Government?

   |   View results
Yes
  57%
 
No
  43%
TOTAL VOTES: 140

Vote