10 Apr 2016

Banks count cost of anti-terror laws

12:15 pm on 10 April 2016

Banks' compliance costs have risen since the introduction of laws to counter money laundering and the financing of terrorism.

A hand enters account details on a laptop (file)

Photo: TEK IMAGE / SCIENCE PHOTO LIBRARY / ABO / Science Photo Library

Changes introduced three years ago under the Anti-Money Laundering and Countering Financing of Terrorism Act require banks to have rigourous monitoring regimes to check customers' financial behaviour, in a wider sense than just transactions.

KPMG forensic team senior manager Tim Goodrick said financial institutions had to constantly update their monitoring systems to detect and deter the illegal activities.

Tim Goodrick

Tim Goodrick Photo: RNZ / Laura Bootham

He said as soon as one system was put in place, criminals worked '24/7' to counter it. He said the market for people with forensic accounting skills had become very competitive.

"The Anti-money laundering (AML) and counter-terrorist financing (CFT)] systems, you can't just set and forget them, it's a constantly evolving land."

Mr Goodrick said the costs of compliance had increased because banks constantly needed to review their systems to make sure they were up to date.

"International reports came out last year looking at new ways terrorists are moving money, so financial institutions in New Zealand need to look at that and say 'how can that impact on our risk?'."

The Bankers' Association said complying with the law changes, as well as new regulatory requirements, had required substantial investment and resources, including people.

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