Many boards in the region remain unwilling to spend on upgrading their banks’ systems to combat money laundering. Failure to comply with anti-money laundering (AML) measures can be costly, as Lloyds Banking Group discovered in January when it was forced by the US Treasury to forfeit $350 million for facilitating and falsifying wire transfers from blacklisted parties in Iran and Sudan. So far, no banks in Asia have been hit with similar-sized fines for poor compliance, but that does not mean that they have adequate processes in place.

“Very few home-grown Asian banks per se, not the foreign banks in Asia, are up to international standards in group-wide, enterprise-wide AML transaction monitoring vigilance,” says Jay Jhaveri, Asia director for World-Check, which provides a global database of heightened-risk individuals and businesses, including known terrorists and shell banks. World-Check’s database is used by 47 of the world’s 50 largest banks, as well as banks in Asia including RHB Banking Group in Malaysia and Korea’s Shinhan Bank. Last month, World-Check acquired Integrascreen, which conducts bespoke due diligence on companies, allowing it to offer an improved end-to-end risk management service.

Source: The Asian Banker

BIIA Newsletter April 2009 Issue