January 18, 2005

Compliance has become a strategic differentiator, according to Simon Moss, CEO of Mantas (Herndon, Va.) "The decisions that financial institutions are making about their corporate governance, about their compliance, about their Sarbanes-Oxley adherence, about their anti-money laundering - not just in technology, but in training, in processing and in awareness - will all have a very significant impact on the way that firms will operate over the next few years," he says.

Prior to September 11th and the USA PATRIOT Act, financial institutions had a similar outlook and level of investment into their anti-money laundering efforts. "The systemic 'wall' to stop money launderers was generally at the same height," says Moss.

Differences in the size of that wall are beginning to emerge. "Over the last three years, firms have been making decisions that have essentially changed that landscape," notes Moss. "The firms that invest more into a serious culture of awareness, serious technology, serious training, and take this problem seriously, will drive money launderers or fraudsters or employees looking to do malfeasant actions to other institutions."

Thus, Moss expects a "polarization of the market," he says, "in which our adversaries look to find routes of least resistance - a higher 'ROI,' so that they get more cents on the dollar from their activities."

"Money launderers are probably better business people than we are," he adds.

The expected shift of money laundering traffic from heavily-protected institutions to less-protected institutions may cause an increase in regulatory requirements. And, if that comes to pass, the required solutions would likely have to span across lines-of-business, geographic regions and regulatory jurisdictions, suggests Moss. "These [money launderers] have assets at their disposal that essentially skim the financial institution, by being able to enter the market, say, in Asia, and exit the financial institution in Europe or in the U.S., or enter through a private banking relationship in one geography, but then exit through a brokerage relationship in another."

For its part, Mantas has announced two new products: Mantas Select, which allows firms to customize which areas of focus are most important to their specific businesses; and Mantas Advance, a compliance dashboard.

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