Banking - the way forward Research Paper Example | Topics and Well Written Essays - 5000 words

Banking - the way forward - Research Paper Example There is a paucity of good data as to why newer and more effective computerized banking technologies were not utilized in the first place when these technologies are readily available. It is just a matter of re-programming their IT structures and software to make these anti-money laundering efforts more effective. The present methods allow too many loopholes for bank officers to be complicit. This is a good reason why anti-money laundering should have a minimum of human interventions in place of adopting newer technologies to remove the human elements in the detection and reporting of possible money laundering. The authorities are looking into alternative banking and remittance systems a bit more closely through the Serious Organized Crime Agency (SOCA) as good avenues for money laundering (Burns & Peel, 2006:1). Ironically, Col. Qaddafi and his family have billions stashed away in UK banks. The question is how were they able to move such huge sums without triggering the anti-money l aundering laws of the country? Private banking involves investing for select individuals sizable assets in businesses where large sums of money are normal. Examples are insurance, stock investments and building societies (Bicker, 1996:143). A new troubling area in money laundering in the UK is the use of private trusts (OECD, 2006:30). Private banking plays a big role in the setting up of various trusts (Kalin and Goldsmith, 2007:28) for property ownership and wealth management but pose big risks. The present anti-money laundering technologies produce mostly a bunch of data that relies to a great extent on human interventions. Again, these reports are reliable only to the extent on how reliable are the people who reviewed these reports. In other words, the degree of human intervention in reporting makes these efforts to control dirty money mostly wasted efforts because the humans involved (bank officers) compete in an environment that is not very conducive to compliance with anti-mo ney laundering regulations. When the dirty money amounts to substantial sums, and banks are in need of liquidity, the incentive to comply with the laws and regulations is much lessened. The more crucial priority is the survival of the banking institution itself and so the â€Å"dirty money† continues to flow and bank officers turn a blind eye. There is a need to inject a sense of urgency to anti-money laundering efforts because the survival of society itself is at stake. It has social, political, legal and economic implications which are mostly adverse to the well-being of the people. If these efforts fail, it can mean only that crime really pays. It will also encourage other people to commit the same crimes and get rich themselves. Money laundering threatens and undermines the thread that keeps a society functioning because of its corrosive effects on the moral values of people. Its tentacles are slowing finding its ways into various aspects of daily life. A review of existi ng literature on money laundering will indicate that people are aware of the seriousness, magnitude and urgency of the problem (ADB, 2003:5) but there is a lack of materials on why money laundering continues to proliferate. Most literature materials on this topic have not discussed or investigated why present anti-money laundering efforts have largely failed to stop the flow of illegal funds around the world