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Banks must do more to fight money laundering

Update: June, 19/2013 - 11:30
HCM CITY (VNS)— Banks show little interest in training their staff to deal with money laundering and should pay more attention to combating the flow of dirty money, experts warn.

IT plays a significant role in the task, but banks' technology staff are not properly briefed on anti-money laundering and are thus confused about choosing the right software for this, Nguyen Van Ngoc, head of the State Bank of Viet Nam's Anti Money Laundering (AML) Department, said.

Speaking at a seminar on money laundering held by the Viet Nam Banking Association and IT consulting firm Komtek in HCM City yesterday, he admitted that the economic situation meant the budgets for AML IT systems are limited.

Fewer than 10 banks in Viet Nam use specialized, established solutions for AML, he said, but even they are mainly concerned with transaction safety.

Credit institutions should not get mixed up about the purpose of their IT solutions, whether for AML or credit ratings, he said.

Only IT solutions can help screen, identify, and filter their numerous customers, recognizing those with potential risk of AML and featured on black lists, including large-value and suspicious transactions.

Saito Masaru of Japanese IT solution provider TIS, spoke about the duties of financial institutions in his country.

"They have to verify customers' identity at the time of transaction, purpose of the transaction, details of customers' occupation/business, beneficial owners, assets/income," he said.

They then preserve verification/transaction records and take measures to ensure the accuracy of the verification at the time of transaction, he said.

Banks in Japan tend to incorporate watch list filtering, transaction monitoring, and finally risk scoring functions in their existing systems, he added.

Shon Heung Woo of South Korean IT solutions provider GTOne, said all banks and medium and large insurance, securities, and credit card companies in S.Korea deploy AML systems.

Identification and AML systems are advertised aggressively to the public in banks.

In case of large deposits or withdrawals, customers are required to explain the purpose of the funds, he said.

Any refusal is reported in suspicious transaction reports, he added. — VNS

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