Extent of anti-money laundering revealed: Report



By Dr. Tim Sandle
October 11, 2024


Image: - © POOL/AFP/File Patrick Pleul

The Anti-Money Laundering Megaminds Report finds that 70 percent of experts warn the fight against money laundering is failing. This comes from the anti-money laundering (AML) automation company Strise.

Is the fight against money laundering failing? Most AML professionals agree that current measures are inefficient, citing outdated legacy systems, fragmented data, and overwhelming false positives as major obstacles. One expert emphasised that “relying on outdated technology is like bringing a knife to a gunfight” calling for urgent modernisation of AML infrastructure.

By synthesising over 60 hours of in-depth conversations from The Laundry podcast, one of the industry’s leading podcasts on money laundering, the report details the output from artificial intelligence systems used to identify critical trends shaping the future of AML and financial crime prevention.

What are the top threats in financial crime?

Experts warn of rising threats, including cyber-enabled financial crimes, sophisticated sanctions evasion techniques using decentralised finance (DeFi), and the expansion of professional money laundering networks. Emerging technologies are making financial crimes more complex and harder to detect.

Emerging technologies

The report provides insights on the effectiveness of sanctions, the inefficiency of current AML systems, and the transformative potential of emerging technologies like AI and machine learning.

Pioneering the use of AI in financial crime intelligence

The AML Megaminds Report is an authoritative, data-backed resource that is both forward-thinking and practical, according to Marit Rødevand, CEO & co-founder of Strise and The Laundry host. Rødevand adds: “This report is a game-changer. By using AI to weave together the experiences and insights of over 80+ financial crime professionals, we’re offering a uniquely holistic view of the industry’s most critical challenges and opportunities. It’s an invaluable tool for anyone involved in financial crime prevention, and we’re proud to be at the forefront of this innovation.”

Is the industry suffering from sanctions fatigue?

While sanctions remain a vital tool, 40 percent of experts believe they are not fully effective. Many questioned their long-term impact and pointed to issues such as “sanctions fatigue” and the potential for driving illicit activities further underground. Others, however, highlighted success stories such as the freezing of Russian oligarchs’ assets, showcasing the importance of better-targeted sanctions and stronger enforcement.

Companies must also invest in the best available systems. Here regulatory pressure is the primary driver for making financial crime prevention a priority at the senior management level. The threat of significant fines and reputational damage compels boards to focus on compliance and crime prevention initiatives.

What are the main solutions for tackling financial crime?

Reframing financial crime as a public health issue could allow governments to allocate resources similarly to how they handle pandemics, with emergency powers to freeze assets, force cooperation from private entities, and impose mandatory reporting for suspicious activities. Other solutions include mandating the use of AI for all financial institutions, traditional banking secrecy laws, or creating public beneficial ownership registries with blockchain verification.

Rødevandcontinues: “Financial crime impacts every facet of society, and we can no longer afford to operate in silos. This report is not only a synthesis of expert opinion but a catalyst for change. We can’t keep doing the same things and expect different results. The inefficiency identified by the majority of experts signals that it’s time for a paradigm shift in how we approach AML efforts.”

TD Bank to pay more than $3 bn to US in money-laundering case


By A FP
October 10, 2024


TD Bank has agreed to pay $3 billion in penalties for failing to adequately monitor money laundering by drug cartels, US officials say - Copyright GETTY IMAGES/AFP SPENCER PLATT

Canada’s TD Bank has agreed to pay more than $3 billion in penalties for failing to adequately monitor money laundering by drug cartels, US officials said Thursday.

TD Bank, the 10th largest bank in the United States, has pleaded guilty to multiple felonies including violating the Bank Secrecy Act and conspiracy to commit money laundering, Attorney General Merrick Garland said.

“TD Bank created an environment that allowed financial crime to flourish by making its services convenient for criminals,” Garland said at a press conference.

“Our anti-money laundering laws dictate that a bank that willfully fails to protect against criminal schemes is also a criminal,” Garland said. “That is what TD Bank was.”

Garland said that between January 2014 and October 2023, TD Bank failed to monitor $18.3 trillion in customer activity, allowing three money laundering networks to transfer over $670 million through TD Bank accounts.

Under the settlement, TD Bank will pay $1.8 billion to the Justice Department and another $1.3 billion assessed by the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

Criminal investigations into individual employees at TD Bank were “active and ongoing,” Garland said.