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In every longstanding relationship, there comes a point when both parties begin to question something they once thought they had agreed on. Talk to a Bank Secrecy Act officer at a conference, over dinner or in a bar and one point of friction with federal regulators inevitably becomes clear.
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.
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.
The report, published by the Boston-based consultancy Aite Group, found that most banks surveyed named AML as their most important compliance issue, beating out data security and consumer privacy issues.
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.
