The Asia-Pacific (APAC) is the world’s most wayward region in reporting financial crimes, with 87% of APAC respondents said they consciously choose to violate laws and incur anti-money laundering (AML) fines “all the time,” “regularly” or “occasionally,” according to a report from ComplyAdvantage.
Based on a survey of 600 C-suite and senior compliance decision makers, conducted in Q4 2020 across North America, Europe and APAC, the study showed that the global average was 80%, and the figures in North America and Europe were 79% and 76%, respectively.
Respondents came from enterprise banking, investments, crypto, insurance and fintech organisations.
Among the three APAC markets surveyed, Singapore-based respondents were the most law abiding with only 72% said they will violate laws and incur fine, followed by Hong Kong (90%) and Australia (95%).
ComplyAdvantage said such an attitude among banking leaders and compliance professionals undermines global and APAC governments’ efforts to fight financial crime, which has been on the upswing since the onset of COVID-19.
Jaede Tan, Managing Director of ComplyAdvantage Asia Pacific, said that as a result of COVID-19, financial institutions today handle a much higher volume of digital payments, many of which need to be processed near instantly.
“Few of them have the processes and technologies in place to be able to carry out due diligence checks and where necessary, block the transactions, in milli-seconds,” said Tan.
“In the interest of maintaining profit, financial institutions often let unknown or even questionable transactions go through. This exposes them to punitive action from the authorities and, of course, reputational damage,” he added.
Findings also show that suspicious activity report (SAR) filing was on the rise with 76% of APAC respondents saying they filed more SARs in 2020 than the previous year. This could be due to the higher number of COVID-related crimes that exploit accelerated digitalisation.
Also, 94% of APAC respondents stated that real-time AML risk data would improve their compliance operations. This is because in today’s environment, banking transactions that take even minutes to clear would degrade customer service.
Fraud is a significant contributor to financial crime in 2020, with 68% of APAC respondents ranking improving fraud detection as their highest priority. Tackling fraud is important because it directly addresses criminal activity and protects institutions from immediate and significant financial losses.