Tokyo, Japan
September 27,
2002
Anti-Money Laundering: A Brave New World for
Financial Institutions
Report Published by Celent
To achieve compliance with anti-money
laundering regulations introduced in the wake of terrorist attacks of last
year, the US banking, securities and insurance industries will spend a
combined total of US$10.9 billion through the end of 2005,
according to projections by Celent Communications.
In a new report entitled Anti-Money
Laundering: A Brave New World for Financial Institutions, Celent
examines the extent of money laundering globally, and what financial
institutions can - and in the US, must, by law - do to combat this
widespread criminal practice.
Over the last 30 years, regulatory efforts
and industry procedures to combat money laundering have been restricted
largely to the banking world. The terrorist attacks of last year
have now ushered in a brave new world of anti-money laundering (AML)
regulation for virtually the entire US financial industry, in the form of
the USA PATRIOT Act.
Of the total cost to US financial
institutions to comply with the Act, software and hardware will account
for six percent of total spending, or US$695 million. IT maintenance
will account for 30 percent, or US$3.3 billion. Employee training,
reporting, and compliance will make up the remaining 64 percent of AML
spending through 2005.
"In the brave new world of
post-9/11 AML requirements, financial institutions will need to develop
comprehensive procedures to combat money laundering and to ensure
compliance with the new government regulations," says Neil
Katkov, author of the report. "Considering that AML
practices - not to mention regulations - are an evolving art, keeping up
with new technologies, methods and regulations will remain a challenging
task for some years to come."
The report presents an overview of the
global money laundering market, estimates the cost to the US financial
industry of implementing AML programs to comply with the new regulations,
and outlines what financial institutions should do to comply with these
new rules. The report contains 11 charts and 3 tables.
A Table
of Contents is available online.
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