US gets tough on money laundering

The US financial services industry is ploughing more funds into technologies designed to combat money laundering, in an effort to meet the US Patriot Act compliance deadline of 24 April.

Money laundering involves moving illicit funds, which may be linked to terrorism, drug trafficking or organised crime, through a series of financial institutions or accounts to disguise origin or ownership.

America Software said it has signed a contract to install its Assist money laundering detection system at Helm Bank, a commercial operation with headquarters in Miami.

The software enables banks and other financial institutions to track, detect, investigate, report and manage suspicious activity, including money laundering.

America Software has also installed Assist at Standard Chartered, a London-based emerging markets bank with more than 500 offices in 50 countries.

Swiss bank UBS joins the Bank of New York, Archipelago, Barclays and the London Stock Exchange as the latest to use UK technology firm Searchspace's intelligent software to monitor banking.

UBS, which employs 70,000 people, 42 per cent of whom are in Switzerland and 39 per cent in the US, intends to use the software to identify suspicious movements of funds throughout its branches.

Searchspace's artificial intelligence software, called Intelligence Enterprise Framework, enhances existing systems to allow for transaction monitoring.

Konrad Feldman, chief executive at Searchspace, said: "The clock is ticking as new anti-money laundering requirements set forth by the Patriot Act last autumn rapidly approach."

The company recently teamed up with IBM to help companies meet the deadlines.

"We've reduced the time to implementation, allowing organisations to quickly develop a commercially reasonable response that will comply with these fast approaching new regulations," explained Feldman.

Breffni McGuire, an analyst at TowerGroup Global Payments, said that anti-money laundering products have traditionally been viewed as part of a compliance checklist needed to meet mandated requirements.

TowerGroup expects spending by US banking institutions on such technology to reach at least $60m (£41.8m) by the close of 2002, with total financial services industry spending likely to be double that amount.