Technology Cleans the Dirty Money
Technology Cleans the Dirty Money
December 13, 2007: New anti-money laundering rules have now come into effect this week, with a range of technologies now presenting the key to assisting financial institutions in meeting stringent recordkeeping obligations.
The new laws come as a results of the Anti-Money Laundering/Counter-Terrorism Financing Act (AML/CTF) passed by the Australian Parliament in December 2006. As of December 12th 2007 organisations undertaking financial transactions – like banks, betting agencies and casinos – are required to comply with regulations and step up their identification and reporting procedures around transactions.
At the time of the Act, adoption procedures were given a 24 month period in order to allow organisations to adjust and change their systems to meet the changing regulations. Businesses are required to lodge their firm compliance reports by March 31, 2008. By December 2008, organisations will be required to provide ongoing customer monitoring or due diligence.
Paul Magee, CEO of VeCommerce says the role of technology in meeting these regulations and consequently assisting in combating money laundering, is significant. “Most organisations find it relatively easy these days to establish an account or a customer profile for somebody,” he says.
“But we need to make sure people accessing that are the same person, and that their activities can be referenced.”
It’s the recordkeeping process and component of AML/CTF that is expected to assist in tackling the global money laundering. However it’s not necessarily the traditional paper based identification papers that will meet these demands. “With something like speech recognition, you can not only ask the person to identify themselves, but also keeping that identification happening and retain the recordings for reference later on,” says Magee.
While VeCommerce has launched a biometric voiceprint framework outlining how voice biometrics can assist affected organisations to meet their obligations, Magee admits it’s not necessarily the final solution for all transactions.
“The Act goes to some lengths not to actually specify how these obligations will be filled, leading organisations to have the flexibility to adopt processes and procedures on their systems,” he says. “The Act has put the onus of responsibility for outcomes, and sometimes the way needed to do this are case dependant.
“I think it makes sense for organisations to be free to chose the best systems and processes that suit their requirements.”
Failing to comply with the Act could have drastic circumstances for some businesses. In recognising responsibility ends with the end-users rather than businesses as a whole, individual staff could receive the brunt of the punishment, with criminal offences involving jail terms and hefty financial penalties by failing to comply.
Outside of financial services and gambling companies, the second tier of companies are expected to comply with the AML/CTF regulations by December 2008 and include lawyers, accountants, jewellers and real estate agency.
According to Austrac AML/CTF marks a significant step forward in enabling Australia to maintain business relationships and prevent and detect money laundering and terrorism while also assisting law enforcement agencies for targeted information about criminal activities.
A recent survey from Pricewaterhouse Coopers of organisations facing similar compliance mechanisms in the UK has found that 90 percent of UK firms are compliant with the anti-fraud regulations.
KPMG’s Global Anti-Money Laundering Survey of 2007 finds the global amount of money laundered exceeds US$1 trillion. However other quantified figures linger around the US$500 billion mark.