Source | www.hcamag.com
When HSBC Holdings Plc thwarted a US$500m central-bank heist, sophisticated computer software didn’t raise the alarm. The funds flowed undetected from Angola’s reserves to a dormant company’s account in London. It was a teller at a suburban bank branch who became suspicious, declined a request to transfer US$2m, and triggered a review that uncovered the scam, according to one account of the episode.
That was two years ago, and the finance industry’s battle to stop the illicit transfer of as much as US$2tn a year around the globe hasn’t become any easier. At least a half-dozen lenders in Europe have found themselves at the center of fresh allegations of dirty money schemes in the past year. The wave of scandals—at Denmark’s Danske Bank A/S, Deutsche Bank AG, and others—is undermining confidence in the industry well beyond the individual institutions involved.
Financial-services executives have had little choice but to significantly step up regulatory efforts; more than 1 in 10 now spend in excess of 10% of their annual budgets on compliance, according to financial adviser Duff & Phelps LLC. Banks are eager to find ways to bring that spending down—management, employees, and shareholders never want to spend on what are effectively internal cops.