Celent: Detecting Dirty Money Costs Real Money

The Celent analysts note that these two reasons are interdependent, with regulatory compliance creating a need to protect the brand, which in turn improves business results. The rising fortunes of the firm make it a more likely fraud and money laundering target, thus renewing the cycle.

The Celent analysts report that the size of a company tends to determine the size of the AML compliance department.

Financial institutions with less than $1 billion in assets typically have 10 or fewer full-time AML staff on hand, whereas, institutions with assets from $1 billion to $100 billion may have as many as 50 full-time AML staffers. This holds true for insurance companies as well as banks, Celent notes, with some conditions.

Worldwide, regulators have given insurers more leeway on AML compliance, relative to banks and brokerages, Celent says, because insurance transactions are usually on multi-day batch cycles, allowing more time to analyze them for suspicious activity. Regulators have also seen less money laundering risk with insurers (as compared to banks and brokers), and as such have permitted insurance companies implementing simpler and often in-house AML compliance solutions.

In the United States, however, regulators see insurance as a vehicle for money laundering, especially as growing online sales, with their faster cycle times and instant decisioning, provide ready avenues for fraud and money laundering. This has led to an ongoing need for insurers to make use of AML technology, especially automating due diligence and AML checks, the analysts say.

Other money laundering coverage from National Underwriter Life & Health:

• FinCEN: Keep Your SARs to Yourself
• FinCen Reorganizes Secrecy Act Regulations
• FinCEN Completes Terror, Money Laundering Search Regs
• FinCen Eyes Suspicious Life Settlement Transactions
• FinCen: Insurers See Possible Terrorist Financing Activity