Three quarters of financial firms still conducting anti-money laundering checks manually

A PwC study found that the use of more automation could strengthen the fight against financial crime

Three quarters of financial services firms in Ireland conduct anti-money laundering (AML) risk assessments entirely manually, while three in five firms outsource some or all of these activities to lower cost locations such as India or South America.

A study by PwC has found that more automation could be used by the Irish financial services industry to “strengthen the fight against financial crime”.

A survey of 61 financial services firms carried out by PwC, found that 75 per cent rely on manual financial crime risk assessments and just 3 per cent use a fully automated process.

Sinead Ovenden risk and regulation partner at PwC Ireland, noted that most firms conduct annual AML risk assessments which can take months to complete.


“The data is then often out of date and does not inform a firm of the up-to-date risk. Increased automation will enable firms to better mitigate financial crime on a real-time basis,” she said.

Some 61 per cent of firms outsource some or all of their AML to locations such as in India and South America. While this reduces costs, PwC warned that this can increase risk if not closely monitored.

The survey revealed that only half of firms have automated some aspect of required risk assessments when onboarding new customers.

It also found that 31 per cent of firms had multiple AML systems that were not integrated and 90 per cent of firms had experienced challenges with fragmented systems that needed manual intervention.

Many large retail banks and E-money firms have implemented automated solutions but other industries are still “heavily reliant” on paper based processes, while the funds industry still relies heavily on emails rather than user-friendly portals.

Almost 90 per cent of firms said there is scope for further automation to improve their customer due diligence onboarding process.

However, as only 51 per cent of firms plan to invest in AML technology over the next five years and just 31 per cent planning to invest in the next year, PwC highlighted the new Senior Executive Accountability Regime which allows personal monetary penalties to be imposed on individuals responsible for AML procedures.

The firm added that the establishment of a new EU AML Authority next year “will only increase the requirements to combat financial crime”, with Ms Ovenden saying that technology and automation “is the only way to keep up with the race against financial crime”.

Ellen O'Regan

Ellen O’Regan

Ellen O’Regan is an Irish Times journalist.