By Geoffrey Bew
MANAMA: Banks in Bahrain are not doing enough to protect themselves from rising levels of money laundering, an expert said yesterday.
Swiss-based IMTF president Mark Busser said that some financial institutions were guilty of using outdated monitoring systems that fail to keep up with evolving criminal techniques used to avoid detection.
The firm is a leading provider of information technology solutions for tackling fraud detection, operational risk management, trading compliance and due diligence.
Mr Busser was speaking at Regulation, Risk and Compliance conference on money laundering and other challenges facing the financial services industry.
The one-day event was held under the patronage of the Central Bank of Bahrain (CBB) in association with the Central Informatics Organisation.
Bahrain-based Gulf United Technology Solutions hosted the event, which took place at the Gulf Hotel's Gulf International Convention and Exhibition Centre.
"Banks have to invest in anti-money laundering systems," said Mr Busser.
"Money laundering does not happen from a simple transaction, but changes in behaviour and with the development of sophisticated tools.
"Normally it is not one person, but a group thing and it is something that is growing all the time.
"If we do not do anything about it there is a reputation risk to the whole industry.
"A lot of banks started to introduce some kind of simple in-house filtering tool, but the success rate of such systems has decreased to almost zero."
Mr Busser said no specific figures are available on what money laundering costs Bahrain's economy annually, but the problem is valued at billions worldwide.
He said Bahrain's position as the financial hub of the Middle East puts it most at risk of being targeted by criminals, who are looking to "clean" money gained from illegal activity to conceal its identity, source and destination.
Terrorists and drug dealers were among the chief players in money laundering activity, but Mr Busser said they could not do it alone.
"In a lot of cases bank employees are involved and they will not do it for free, they will ask for money," he said.
CBB financial institutions supervision executive director Abdulrahman Al Baker stressed the importance of banks adhering to the country's strict regulations at the event.
"Money laundering is an ever-evolving threat," he told delegates.
"Combating it effectively requires a high degree of awareness and personal responsibility among all financial services professionals.
"The authorities in Bahrain have always placed a great deal of importance on compliance with international regulatory standards.
"We believe that this has been a major factor in Bahrain's success as a financial centre.
"High regulatory standards help give Bahrain international credibility and attract reputable international players in the financial market.
"They also contribute to financial stability and long-term growth."
http://www.gulf-daily-news.com/Story.asp?Article=163490&Sn=BUSI&IssueID=29259
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