A third of senior banking executives believe that their anti-money laundering systems are inadequate, according to a KPMG report.
KPMG's Global Anti-Money Laundering Survey polled 317 anti-money laundering (AML) and compliance professionals in banks and financial institutions across 48 countries.
The survey indicated that almost all (98 percent) are discussing money laundering risks at board level, while 88 percent consider it as being at the top of the company's agenda, up from 62 percent in 2011.
However the report showed that there is a lack of confidence in the IT systems aimed at helping prevent money laundering. More than one in three senior executives claim their existing transaction monitoring systems are not effective or efficient.
Only 58 percent believe that monitoring systems are able to prove a detailed oversight of transactions across their firm's different businesses, and 53 percent believe that this is possible across multiple jurisdictions.
Levels of satisfaction with current monitoring systems are reported to have declined in the past year despite more than three quarters (78 percent) of survey respondents increasing their total AML spending. 74 percent predict further increases in AML investment over the next three years.
Of thos AML spending, transaction monitoring systems represented the largest investment, with 60 percent of respondents, ahead of other activity such as implementing 'know your customer' (KYC) intiatives, recruitment and meeting FATCA regulations.
The report adds that senior management at banks investing in improved AML systems "may find comfort" in considering the cost benefits compared to "being sanctioned or fined, damaging the firm's reputation and facing regulatory, shareholder and public scorn".
A lack of protection against money laundering has cost banks significant sums in the past. Most notably, HSBC was forced to pay a £1.2 billion settlement to US authorities following claims the bank was being used to launder drug money by Mexican gangs. The bank subsequently spent $290 million (£175m) improving its systems.
Last week South Africa's Standard Bank revealed to ComputerworldUK that it had invested in new monitoring and compliance systems following a Financial Conduct Authority (FCA) inquiry into business with "high risk" individuals, resulting in a £7.6 million fine for inadequate AML controls.