The financial services industry in India is taking more measures to minimise money laundering than ever before, said a recently released India Anti-Money Laundering (AML) Survey 2012 released by KPMG.
The KPMG survey, released today, found 86% of the respondents stating that their senior management, including board of directors, took an active interest in the AML related issues and discussions.
The survey said organisations are using AML compliance as a parameter to measure senior management performance, which in turn is ensuring accountability across organisational processes and products.
The survey said the internal focus by organisations and external factors such as high-profile corruption cases were leading to tighter AML compliance.
The survey found that out of the total surveyed organisations, 76% said they discussed AML profile on at least a monthly or a quarterly basis; another 41% said they had integrated AML in their business strategy; and 35% said they publicised the AML programme internally.
Rohit Mahajan, partner and co-head, forensic services at KPMG said, “Organisations are using AML compliance as a parameter to measure senior management performance, which in turn is increasing accountability across organizational processes and products. Today, management is setting leadership examples by integrating AML compliance within the business strategy and actively publicizing the AML compliance programme internally – all these activities point to the growing seriousness among the management towards AML compliance.”
The survey indicated that 72% of the respondents had specific procedures in place for updating the principal information on an ongoing basis which comprises of collecting customer information and data to fill any gaps that might exist in the Know Your Customer (KYC) process. Other respondents who did not have a proactive strategy in place to update KYC records cited various reasons such as system limitations, cost and lack of legal mandates.
Not only is the risk of money laundering being taken more seriously, an overwhelming 82% of the survey respondents indicated that the cost of AML compliance would increase over the next two to three years. This rise, would be used in areas such as implementing/upgrading transaction monitoring systems, implementing global policies and remediating/ refresh exercise.