LEXISNEXIS
BUILDING STRONGER DEFENCES FOR NEW THREATS
isn’t just important from a compliance perspective; by taking steps to prevent money laundering, operators are actively contributing to the fight against the funding of organised crime and even terrorism. The issue of improving AML measures is a time- sensitive one too, with 18% of respondents voicing concerns over how Brexit could complicate this work. The UK is currently set to exit the EU on 31st October 2019, and some AML professionals are worried that this could lead to a potential loss of access to European security databases, making the job of identifying potential criminalsand corrupt individuals a lot harder.
In addition, criminals will rarely target just one organisation or sector, and instead tend to launder transactions across multiple channels. This brings about another challenge for the authorities. The LexisNexis Risk Solutions report found that inconsistent AML regimes are a risk, creating blind spots which allow criminals to slip through. It’s clear a more joined up approach between regulatory bodies is needed to ensure that vital information is being shared. There also needs to be better communication between regulators and regulated businesses. Respondents admitted that they are unsure about how their suspicious activity reports (SARs) are being used and to what extent other regulations such as GDPR apply to this data. This is creating a silo mentality that affords criminals greater flexibility and freedom to continue their illegal efforts. Tellingly, of the 463,938 SARs submitted to the NCA in the 12 months to March 2018, only 0.46% were from gaming organisations. Understanding the scale of the problem is just the beginning, though, as money laundering is constantly evolving. In fact, nearly a quarter of respondents (24%) pointed to evolving criminal methodologies as the biggest driver of this issue.
As a result, many in the gambling industry are already starting to review their AML measures and committing greater resources to this area of their
businesses. According to the report, over 40% of current AML budgets among
operators is dedicated towards technology, and a significant majority (78%) are planning to increase their investment in technology for AML initiatives over the next five years.
When asked what needs to be done to beat money launderers, just under a third (32%) cited stronger technology with more intuitive analytics. However, this is only part of the solution, with 36% wanting greater clarity from regulators and 30% needing more frequent guidance to this effect.
Employees interacting with new customers and processing preliminary transactions are clearly on the frontline of this activity, as such they need to know what to look for and what to do if they suspect they are liaising with a potential money launderer. This was the sentiment of many AML professionals working within the gambling sector, with 77% anticipating the spend To help improve AML measures across the gambling industry, greater education and guidance from numerous parties will, therefore, be of significant help, especially when combined with greater coordination between different authorities and industries. Vitally, improved systems and KYC technologies will empower operators on the frontline when they are potentially directly communicating with the money launderers themselves.
This is not an easy challenge, but with the right tools at their disposal, the gambling industry can certainly improve the odds and turn these in their favour.
In the past year alone, the Gambling Commission issued a record £19.6m in fines following AML breaches
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