The Head of Compliance and Training of Standard Chartered Bank India and South Asia P. Ananthakrishnan says, citing International Monetary Fund (IMF) data, money laundering, whereby monies gained through crime and other illegal means are infused into formal circulation, is a global problem amounting to two to five percent of the world’s economy.

"Money-laundering refers to the proceeds of crime that are run through the financial system to disguise their illegal origins and make them appear to be legitimate funds. Most often associated with organized crime, money laundering can be linked to any crime that generates significant proceeds," Ananthakrishnan said.

"With the evolution of financial markets, money laundering today has become increasingly evident in the financial industry. Sectors and areas such as casino and gaming, securities transactions, real estate, gem and jewellery, money transfer business, internet payment systems and tax havens are found to be more susceptible to money laundering," he said.

While technology in the form of systems which filter ‘unusual’ transactions and suspect names has definitely helped spot suspicious activity, it is important for industry to focus on anti-money laundering training aimed at sharpening the skills of business managers so as to quickly detect a suspicious activity or transaction that could otherwise go unnoticed.

"It is important to make Suspicious Activity Reporting a mandatory and a serious control measure rather than a routine reporting exercise," he added.

Many regulatory and governmental authorities quote estimates each year for the amount of money laundered, either worldwide or within their national economy. According to the International Monetary Fund, a frequently cited figure is 2 percent to 5 percent of the global economy.

Ananthakrishnan made these comments at training programme for financial professionals organised Standard Chartered Bank Colombo last week. The program titled ‘International Trends on Suspicious Activity Reporting (SAR) and Money Laundering’ aimed at training industry experts to effectively counteract a globally recognized threat, not only to the banking sector but to a country’s economy as a whole. 

He stressed the importance of a banker’s vigilance which is pivotal in supporting FIU and other law enforcements authorities in fighting this menace.

The training session provided an outline on the various modes of money laundering and offered useful and important tips on how to identify suspicious activity.

Ananthakrishnan also highlighted the importance of building relationships with customers and enhancing the knowledge about customers which is vital to safeguard both the bank and its customers from suspicious financial transactions. 

In addition to many case studies, he shared some of Standard Chartered Bank’s best practices which have helped the bank detect and curb such activity.

He shed light on new sectors that have fallen prey to suspicious activity and stressed the importance of looking beyond the obvious in terms of transactions as well as sectors affected by the problem.

Nearly 55 legal and compliance professionals representing local and foreign banks, the Financial Intelligence Unit of the Central Bank of Sri Lanka, Insurance companies and other financial institutions attended the session.

Ananthakrishnan counts over 27 years of banking experience, 16 of which has been with Standard Chartered Bank.

He held the position of Head of Compliance and the Country Money Laundering Prevention Officer for India, prior to taking up his current position, as the regional head of compliance training for the Standard Chartered Group in the South Asia region.