The answer to being more effective at stopping money launderers is to challenge the value of processes that are clearly failing. Financial crime expert Martin Woods explains.
Earlier this year, David Lewis, the Executive Secretary of the Financial Action Task Force (FATF), was asked to provide his opinion on how effective the global anti-money laundering (AML) community is performing. His answer was profound and honest: “Everyone is doing badly, but some are doing worse than others.” Credit to him, as he included himself and the FATF in the answer, but it is a damning indictment of our collective AML efforts.
As the Executive Secretary of the FATF, Lewis has all the necessary data to enable him to see this bleak picture. It has been estimated only 1 percent of laundered funds are seized globally. Seen another way, this is a 99 percent failure rate and should no longer be tolerated. Thus, the biggest threat in the fight against money laundering and the harm caused by money laundering is to tolerate the failing status quo of our AML policies, procedures and practices.
I posit that we fail because we lack focus, leadership, training and the courage to admit to our failings. All of this is predicated upon a blunt approach, which all too often sees firms seeking to be all things AML, to all customers and all…
