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Trends in Anti-Money Laundering Compliance: Evolving Practices and Strategies

Trends in Anti-Money Laundering Compliance: Evolving Practices and Strategies

Aite Group assesses that only 65% of institutions’ AML budgets are aligned with regulatory demands.

By Eva Weber

Boston, MA, August 11, 2008– A new report from Aite Group, LLC examines anti-money laundering (AML) compliance trends and institutions' responses to issues surrounding AML compliance. Based on a survey of 17 North American banks conducted by Aite Group in Q2 2008, the report aims to help financial institutions understand the evolution of AML compliance strategies and the regulatory demands that drive them.

AML compliance is recognized as a vital issue by regulators and financial institutions alike. While this generally means that AML receives the necessary attention and resources, there is also a constant evolution in AML compliance strategies and the regulatory demands that drive them. Regulators will continue to ratchet up their expectations when it comes to effective AML compliance, and, as the regulations prescribing AML compliance continue to evolve, institutions will have to continuously adapt. Today, Aite Group assesses that only 65% of institutions' budgets are aligned with regulatory demands. Even more alarmingly, only 25% of small institutions' budgets are aligned, while 75% are stressed where regulatory expectations outweigh available funding.

"Institutions are reacting to regulator demands by investing in new systems and processes, but the industry still has a way to go before it can declare an AML victory," says Eva Weber, analyst with Aite Group and author of this report. "AML compliance is a game in which the goal posts are always moving. Since regulators expect institutions to make a good-faith effort to prevent money laundering, the constant evolution of the problem requires a constant evolution of the solutions."

This 29-page Impact Report contains 21 figures and one table. Clients of Aite Group's Fraud & AML service can download the report.