Given this backdrop, KPMG International commissioned this Global Anti-Money Laundering (AML) Survey to build on the findings from our last survey in 2004. Three years on, we have sought to establish whether the significant changes in the financial and regulatory environment have led to increased focus on AML and new and improved ways of tackling the challenge. Our survey shows how significantly banks have responded to this challenge

– in increased investment, senior management focus, and cooperation with governments, regulators and law enforcement. Despite this good intent and strong commitment, many banks continue to struggle to design and implement an effective AML strategy, and they believe that much more needs to be done internationally to combat money laundering more effectively.

Since our last survey in 2004, there has been unprecedented change in the financial market place and the regulatory environment, key developments include :

• Banks have a more international footprint, markets and products have become more complex, there is greater investment in emerging markets, the amount of privately held wealth has vastly increased, and all alternative asset classes have undergone significant growth. These structural changes have deep implications for how banks tackle the challenges of AML and counterterrorist
financing (CTF).
• At the same time, banks have had to come to terms with significant regulatory change across all of their activities and operations globally. This includes legislative changes (for example, those stemming from Basel II) but also increased focus on the wider responsibilities of financial institutions, and development of the right regulatory framework to deliver the outcomes governments and regulators seek. This has led to stronger emphasis on corporate governance and senior management accountability, and has led some governments, in particular the U.S. government, to seek to apply their standards globally through the extra-territorial reach of U.S.law.
• In addition to the wider regulatory changes, there have been enhancements in AML standards specifically, with changes in the requirements of the Financial Action Task Force (FATF) and Wolfsberg Group, together with new legislation at the national and supranational level (including the EU Third Money Laundering Directive). There has also been tougher enforcement of AML requirements, particularly in the U.S. but also internationally, reinforcing the message that money laundering remains a key priority for banks.

Our survey points towards significant investment and improvement in the AML systems and controls environment within individual financial institutions, together with an understanding and commitment to the role banks have to play in the overall AML and counter-terrorism effort. However, there is also more to be done to make the financial system less vulnerable to money laundering and terrorist financing. For banks, this means greater focus on the......

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