Each bank only aware of a small part of a large money laundering scheme so close collaboration is needed, Hanoi workshop hears.
As financial transactions become increasingly diverse, banks will need to work together and invest more in new technologies to carry out anti-money laundering (AML) programmes effectively, experts told a workshop on anti-money laundering in the digital age held on May 16 in Hanoi.
Themed “Readiness to Conquer Challenges in Anti-Money Laundering and Employ New Technology Trends in the Fintech Era”, the workshop was held by the State Bank of Vietnam (SBV) with technical assistance from PricewaterhouseCoopers Consulting Vietnam, a member of the global PwC network. The event attracted nearly 100 representatives from the SBV and the Risk Management, AML, and IT teams of commercial banks currently operating in Vietnam.
During economic integration, the increased diversity of financial transactions and the emergence of new, disruptive technologies are posing many challenges for Vietnamese commercial banks in complying with AML regulations now and in the future. The workshop was a platform for SBV representatives to provide updates on AML regulations and for PwC’s experts to share global and regional insights on implementing AML in the digital age.
Addressing commercial bank representatives at the workshop, Nguyen Van Ngoc, Head of the AML Department at the Banking Supervisory Agency under the SBV, said that the AML Department has cooperated with appropriate government agencies to carry out various programmes to transform the legal framework for AML and provide guidance on AML implementation according to international best practice. These changes have been pursuant to the National Action Plan on Anti-Money Laundering and Combatting the Financing of Terrorism in the Period of 2015-2020, under prime ministerial Decision No. 2112/QD-TTg dated November 25, 2014.
He also said, however, that commercial banks across the financial system will need to be proactive in order to improve the effectiveness of AML implementation.
Sharing a similar point of view, Grant Dennis, general director of PricewaterhouseCoopers Consulting Vietnam, said that Vietnamese banks should strengthen awareness programmes on AML across different levels and functions in their organisations. Most importantly, there needs to be a strong tone at the top and strict enforcement action on breaches in AML compliance.
“It is not just about compliance and safeguarding reputations,” he said. “Strengthening AML capacity can help banks improve the quality of their operations and decrease risks in international transactions. To realise that, bank leaders will need to be active in setting clear directions and monitoring this important function.”
PwC experts also presented notable findings on Southeast Asia from the 2018 Global Economic Crime and Fraud Survey. The PwC survey revealed main trends in AML implementation, such as stricter regulatory environments and the application of disruptive technologies.
With regard to the challenges in AML, Alex Tan, Leader of Forensics Services at PwC Malaysia, said: “There are many challenges that have been identified during the implementation of AML in the region. These include the limited use of technology, the absence of the right tone at the top, ineffective customer risk scoring, KPIs not matching responsibilities, and transaction monitoring personnel lacking the necessary capabilities and experience to detect suspicious activities and deliver quality reports.” “Inappropriate technology is also a major challenge as it leads to poor data feeds, lack of data, and transaction monitoring systems that are not fit for purpose or do not cover all operations.”
In order to help commercial banks resolve such problems, speakers at the workshop presented some best practices in governance and new technology solutions that are starting to gain a foothold in developed markets, such as biometric technology for customer onboarding and robotic process automation for transaction monitoring. Representatives from commercial banks also had the chance to share their own AML practices and submit queries and recommendations about AML implementation.
“AML is an area where close collaboration across the banking system is needed,” said Richard Major, PwC’s Financial Crime Unit Leader in South East Asia. “Money laundering schemes can often be very complex and each individual bank can only see a small piece of the picture. Only through collaboration with regulators and other banks will they be able to see the big picture and carry out their AML programmes effectively.”
