Increased Executive Focus On Money Laundering Swells Workload For Compliance Staff

NEW YORK, Sept. 21, 2011 /PRNewswire/ -- Compliance departments are coming under increased pressure to strengthen anti-money laundering compliance because of a growing focus from senior management, but they are hampered in their efforts by a lack of training and resources, according to a joint Dow Jones Risk & Compliance/Association of Certified Anti-Money Laundering Specialists (ACAMS) survey released today.

Survey respondents also pointed to new or increased enforcement of regulation and expansion into new markets as factors contributing to their increased workload. Of the more than 600 compliance and anti-money laundering staff surveyed worldwide, 55% identified additional regulations and/or increased enforcement as their key challenges over the coming year. Over 60% identified staffing and/or training shortfalls as significant challenges. The false positives that arise from screening existing or potential clients against international sanctions and watch lists were also identified as a key challenge, cited by a third of the respondents.  Every occurrence of a client record matching to a name on a sanction, PEP or risk list has to be investigated; the processing of false positives costs institutions time and manual effort to handle and research.

"Companies are coming under increasing pressure to meet enhanced anti-money laundering regulations at a time when staffing and resources are scarcer than ever," said Rupert de Ruig, managing director of Risk & Compliance, Dow Jones & Company. "The survey highlights the fact that institutions are stretched operationally and struggling with the workload generated by their client screening systems. A significant proportion of the respondents also reported that they have little confidence in the accuracy of their screening data and said they do not proactively test the accuracy of the information they receive from data providers."

"The increase in the size of watch lists in recent years has added significantly to the workload, which may become overwhelming, leading to mistakes and potential regulatory exposure if these issues are not addressed," added Mr. de Ruig.

Other key findings from the survey include:

More than 40% of anti-money laundering staff attribute increased workload to expansion into new markets

"The expansion into new markets is a result of companies looking for new opportunities in the aftermath of the global financial crisis," said Mr. De Ruig. "It's positive news that organizations are still expanding, but growth into some jurisdictions can bring new risk."

False positives are still an area of concern

Nearly 45% of those surveyed said the majority of the alerts they receive from client screening are low-level matches or false positives. Clearing false positives consumes valuable resources that could be spent on other business. Moreover, true alerts that can result in fines, custodial sentences and damage to a company's reputation can be missed when companies respond to large numbers of false positives.

Data quality is key, but few are confident in its accuracy

Because of the significant levels of false positives experienced, more than a third of respondents indicated that they don't have confidence in the accuracy of the data they are using. A further 30% said they've never reviewed the quality of data for client screening, fraud, sanctions or transaction filtering.

Screening for domestic Politically Exposed Persons (PEPs) has already begun

Despite a lack of regulation around domestic PEPs (almost all regulation around the world specifies that domestic PEPs are exempt from screening), nearly 80% of those surveyed said they are already screening domestic clients and third parties against PEP lists as an added precaution.

Over 600 people, representing regulated companies and regulators from across the globe, responded to the survey, which was undertaken in July 2011. Respondents came from various roles including Chief Compliance Officers, Compliance Directors, Compliance Officers and Vice Presidents of Anti-Money Laundering.

ABOUT DOW JONES RISK & COMPLIANCE

Dow Jones solutions for risk and compliance professionals provide financial institutions and multi-national companies with critical risk identification data, enabling clients to meet regulatory requirements and protect them from financial, business and reputational risk. Its services cover a broad spectrum of anti-money laundering, anti-corruption and sanctions compliance-related needs including, 'Know Your Customer', open source due diligence reports and sanctions data for wire payments transaction filtering. Find out more at: www.dowjones.com/riskandcompliance.

ABOUT DOW JONES

Dow Jones & Company is a global provider of news and business information and a developer of technology to deliver content to consumers and organizations across multiple platforms. Dow Jones produces newspapers, newswires, Web sites, apps, newsletters, magazines, proprietary databases, conferences, radio and video. Its premier brands include The Wall Street Journal, Dow Jones Newswires, Factiva, Barron's, MarketWatch, SmartMoney and All Things D. Its information services combine technology with news and data to support business decision making. The company pioneered the first successful paid online news site and its industry leading innovation enables it to serve customers wherever they may be, via the Web, mobile devices and tablets. The Dow Jones Local Media Group publishes community newspapers, Web sites and other products in six U.S. states. Dow Jones & Company (www.dowjones.com) is a News Corporation company (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV; www.newscorp.com).

SOURCE Dow Jones & Company

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