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If March's record penalty against Wells Fargo & Co. has reminded compliance departments of the bite of anti-money laundering regulatory fines, it has also been a reminder of something else. With acquisitions come problems.
Banks spent an average of 63 percent of their compliance budget on internal staff in the second fiscal quarter of 2008, according to a survey released Wednesday. Of the remaining money spent on anti-money laundering compliance, banks spent 31 percent on technology and six percent on consultants.
Financial institutions and other companies will spend 7.4 percent more this year on compliance, risk management and corporate governance, according to a survey issued by AMR Research Inc.
As more and more financial institutions rocked by the deepening mortgage crisis announce painful job cuts, anti-money laundering compliance officers must take quick action to protect their departments, compliance consultants say.
Adjusting prices to account for money laundering risk is akin to charging a customer with a poor credit history a higher interest rate, say both compliance consultants and banking executives, who consider the strategy a logical extension of the industry shift to risk-based AML programs.
Anti-money laundering costs for banks operating in North America jumped 71 percent, the highest among six regions surveyed, according to a survey by consulting firm KPMG.
