lexisnexis industry compliance pros see complacency as biggest aml threat

lexisnexis industry compliance pros see complacency as biggest aml threat

by 16.07.2019 0 comments

Global business and legal research agency LexisNexis Risk Solutions has published a new study on gambling compliance attitudes towards money-laundering, titled – ‘On the Frontline: The UK’s Fight Against Money Laundering’ 

The research conducted by ‘Economist Intelligence Unit’, underlines that industry professionals ‘believe that their sector is at the highest risk of money laundering’.

In its report, LexisNexis Risk Solutions seeks to provide insights on whether gambling maintains an ‘internal culture of complacency’ with regards to developing effective AML procedures.

Citing internal feedback, the research firm details that 40% of AML professionals in the sector ‘identified complacency as the biggest internal barrier’ to tackling the issue.

Further concerns see 40% of sector professionals detail that current UK regulations are only ‘somewhat effective’ in combatting financial crimes.

The negative professional feedback should concern both industry leadership, as LexisNexis points out that wholesale AML compliance budgets have increased 80% over the past two years.

Building new compliance capacities, industry leadership has allocated the majority of budgets towards developing technologies aimed at tackling the problem, the research revealed.

“Over 40% (41.7%) of AML compliance budgets is dedicated to technology at the moment, with over three-quarters of respondents (78.4%) expecting budgets for technology to increase further over the next five years” the report details.

Publishing its 2018/19 Enforcement Report, the UK Gambling Commission has stated that it will place ‘consumer protection’ at the top of its regulatory agenda.

Furthermore, UKGC governance has warned betting leadership that the UK gambling industry cannot afford a further year of responsibility failures, in which the watchdog issued a record £19.6m in penalties against operators who failed to stop money laundering or meet social responsibility obligations.

Presenting the report, Michael Harris, Director of Financial Crime Compliance and Reputational Risk at LexisNexis Risk Solutions stated

“The threat money laundering poses to the gambling sector is very real, and this fact is clearly recognised by those working within it too.

The industry needs to take urgent steps to address this growing threat by ensuring that customer due diligence checks are conducted before allowing any gambling activity to begin, and, given the rise in online gambling, should consider embracing digital know your customer (KYC) technologies.

This, along with training those teams dealing with customers on the frontline to spot money laundering red flags and adopt a risk-based approach, gives gambling operators the best chance of fighting financial crime and meeting their legal obligations.”

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