Dealing with increased rules and regulations is not just a burden for credit unions and other financial institutions in the United States.

More than half – 55% – of the respondents in an international survey of compliance and anti-money laundering officers, directors and vice presidents identified growing regulations and enforcement as key challenges for them in the coming year.

And more than 60% of the 600 respondents said staffing and training shortfalls also posed significant challenges, according to the July 2011 joint survey by Dow Jones Risk & Compliance and the Association of Certified Anti-Money Laundering Specialists.

False positives and other issues in working with outside vendors exacerbate the problem, the survey's sponsors said.

“The survey highlights the fact that institutions are stretched operationally and struggling with the workload generated by their client screening systems. A significant proportion of the respondents also reported that they have little confidence in the accuracy of their screening data and said they do not proactively test the accuracy of the information they receive from data providers,” said Rupert de Ruig, managing director of risk and compliance for Dow Jones & Company.

Every time a customer or member name matches a name on a list, it has to be investigated. About 45% of the respondents said the majority of their alerts are low-level matches or false positives. About a third said they've never reviewed the quality of data for client screening, fraud, sanctions or transaction filtering.

“The increase in the size of watch lists in recent years has added significantly to the workload, which may become overwhelming, leading to mistakes and potential regulatory exposure if these issues are not addressed,” de Ruig said.

Instant Insights /

Rules, Regs and False Positives: AML Survey Finds Sore Spots

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