A PwC report suggests 75pc of Ireland’s financial services firms manually appraise the risks of financial crime, which can guide to them relying on out of date information.
A new report claims most financial services firms still rely on manual risk assessments to deal with financial crime, despite the growing sophistication of these criminals.
The PwC anti-money laundering research looked at 61 organisations within Ireland’s financial services sector, such as banks, insurance providers and e-money companies. The report claims more automation could be used to tackle criminal activities such as money laundering.
The survey found that 75pc of these financial services companies rely on manual risk assessments to appraise financial crime across their businesses, while only 3pc used a fully automated risk assessment process.
Sinead Ovenden, a PwC Ireland risk and regulation partner, said increased automation can enable firms to mitigate financial crime “on a real time basis.”
“Financial firms are obliged to carry out a risk assessment to measure the potential risk of money laundering in their organisations,” Ovenden said. “Most firms do this on an annual basis which can take many months to complete.
“The data is then often out of date and does not enlighten a firm of the up to date risk,” she added.
The survey suggests that only 31pc of financial services firms strategize to invest in anti-money laundering technology over the next 12 months, while 51pc strategize to invest over the next five years.
More than 30pc of the respondents said their anti-money laundering technology infrastructure is based on multiple interconnecting systems which are not integrated. PwC said this can guide to many firms having challenges with their reporting processes and implementing manual intervention as a result.
As anti-money laundering can be resource intensive, 61pc of respondents said they outsource some or all of their anti-money laundering to low cost providers, in locations such as India and South America. While this reduces costs, PwC warned that it can boost risk if it is not closely monitored.
“Technology is the only way to keep up with the race against financial crime and there is much more to do on automation,” Ovenden said. “Many clients have invested over the years but the key to success is a fully integrated technology system. Disparate technology makes it more difficult to gather information, acknowledge suspicious activity and report financial crime.”
Meanwhile, Ireland is in the running to host the headquarters of a new EU Anti-Money Laundering Authority, which could present a significant boost for the Irish economy.
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