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
The True Cost of BYOD - 2014 survey
Twelve months on from our first study, is BYOD a better proposition?
 
Photos: Unboxing the Magnus supercomputer
Pawsey's biggest beast slots into place.
 
ANZ looks to life beyond the transaction
If digital disruptors think an online payments startup could rock the big four, they’ve missed the point of why people use banks, says Patrick Maes.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest Comments
Polls
What is delaying adoption of public cloud in your organisation?







   |   View results
Lock-in concerns
  29%
 
Application integration concerns
  3%
 
Security and compliance concerns
  28%
 
Unreliable network infrastructure
  9%
 
Data sovereignty concerns
  21%
 
Lack of stakeholder support
  3%
 
Protecting on-premise IT jobs
  4%
 
Difficulty transitioning CapEx budget into OpEx
  3%
TOTAL VOTES: 1068

Vote