January 13, 2008
Is there any point in AML?
Over the last few months some of the media attention on the craziness in the financial sector leaves one pondering whether perhaps some of the risk approaches employed by banks are worthy of the budgets underlying them. None the less, I meet enough of these risk managers to believe in them, just. I do pity situations such as the one at Barclays only a few days ago.
A conman is believed to have found the chairman Mr Agius details online and then successfully convinced call centre staff to issue a Barclaycard in his name which resulted in a GPB 10,000 loss. I suppose the good news is that the bank was able to report the loss and the BBC stated:
``Bank chiefs were said to be `burning up` with embarrassment`` and they have chosen to fully refund their chairman.
BBC Report
Let`s leave this one alone, it`s only a drop in the ocean of control weakness across an entire industry. In November the UK government itself (HM Revenue and Customs) lost a couple of computer discs that hold the personal details of all families in the UK with a child under 16. The discs include names, addresses, date of birth, national insurance numbers along with the guardians bank details and while the Chancellor Alistair Darling said there was no evidence the data had gone to criminals, he did urge people to monitor their bank accounts ``for unusual activity``. At this point I suppose one does need to pity 25 million or so people who live in the UK with a child under the age of 16 because their details are floating around out there, wherever there is, let`s hope its not in the Barclays call centre.
BBC Report
What is the real nexus in it all is that the underworld may now potentially be sitting on a permanent source of future opportunities, awash with millions of details from a pool it can draw on to prefabricate new accounts for fraud, money laundering, layering, tax evasion, criminal insinuation, harassment or any device it chooses, an asset with a value in itself I am sure.
Let`s broaden this out a tad, how big is the problem globally?
Well, Good Morning America coincidently ran an article at about the same time as the UK scandal stating ``More than 10 million Americans are victims of identity theft each year, which comes with a hefty price to both consumers and businesses, costing more than 50 billion annually.``
When I read these numbers, that faith in risk management at some of these financial institutions is starting to wane. As a financial community in general of course; I am sure there are some institutions out there doing something sensible outside the norm, but as a risk community do we have any grip over fraud or anti money laundering?
As I see it and the way it appears to be panning out, we are truly kidding ourselves if we believe we are any closer in answering that question.
Posted by CausalEvents at 04:04 AM
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