The cost of fighting money laundering has risen dramatically for banks across the world because of the need to recruit additional staff and install technology systems to detect suspicious transactions.
A study from KPMG Forensic of 224 banks from 55 countries has found that banks' spending on anti-money-laundering systems rose by 58 per cent in the past three years - mainly due to transaction monitoring and staff training costs.
In North America and some Middle Eastern countries, spending rose by 70 per cent or more in the same period.
Costs have risen with pressure from regulators for banks to crack down on the estimated $1,000 billion (€733 billion) laundered each year by drug dealers, arms traffickers and other criminals.
Since it became apparent in 2001 terrorists had moved money through the banking system, institutions have been under pressure from regulators to identify more rogue transactions. More than 70 per cent of the banks surveyed by KPMG said the number of suspicious activity reports had risen.
The rise in the cost of anti-money-laundering is in excess of banks' own predictions when KPMG Forensic carried out its last study in 2004 - respondents had predicted an increase of 43 per cent.
Despite sophisticated monitoring technology being available to spot rogue transactions, 97 per cent of banks sad they were dependent on the vigilance of staff to monitor and identify suspicious activity.
