Money laundering challenges in Asia Pacific

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Money laundering challenges in Asia Pacific

CFO Tech Outlook | Monday, July 11, 2022

there has been an increase in demand for board-level professionals who can ensure that financial crime and emerging technologies are understood and effectively addressed.

FREMONT, CA: Following the global financial crisis, many regional regulators implemented revised requirements for licenced financial institutions (FIs) to improve anti-money laundering (AML), counter-terrorist financing (CFT), and sanctions screening measures, resulting in a much more concerted effort to combat financial crime in the region. Recent trends can be categorised into two ways: those aiming to commit a financial crime and those striving to avoid it. For the former, developing financial technologies such as online banking and payment platforms, as well as cryptocurrency, have become increasingly popular. This has boosted the demand for finance professionals who are also specialists in data, payments systems, and cryptocurrency platforms — as well as their related vulnerabilities. While there has been a competition for managerial and operational skills across Asia-Pacific, there has also been an increase in demand for board-level professionals who can ensure that financial crime and emerging technologies are understood and effectively addressed.

As the pandemic persists, changes in people's lifestyles, particularly the shift to remote working and individuals going online, have hampered financial institutions' ability to detect unlawful activities, contributing to an increase in money laundering. The crisis has resulted in new and increased occurrences of medical counterfeiting, financial fraud, customised cybercrime scams, and exploitation of government-sponsored economic stimulus measures. Criminal gangs use more sophisticated layering tactics to launder the proceeds of their illegal activities. According to the Financial Action Task Force (FATF), a growing number of jurisdictions around the world are reporting an increase in money laundering and cyber-related scams, particularly email and SMS phishing schemes involving fake government stimulus packages, fake distributing aid, infection rate maps, and websites selling non approved masks.

As a consequence of the wide range of financial market maturity and complexity in APAC, anti-financial crime specialists in the area are frequently confronted with a variety of regulatory requirements and standards, which poses distinct obstacles in each operational country. In general, over the last ten years, a more consistent 'high water mark' has been reached, with the FATF and other internationally recognised best practices being adopted into local legal and regulatory frameworks in most major APAC jurisdictions, though some jurisdictions still have deficiencies that make it difficult to implement or enforce some anti-financial crime measures.

 

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