A New Report From Aite Group
Emerging Compliance Issues in the Money Transfer Market

In many cases, it is the unknowns facing the industry - rather than overly prescriptive regulations or overzealous regulators - that concern money transmitters the most.

Boston, MA, October 20, 2008 – A new report from Aite Group, LLC reviews key compliance challenges facing U.S. money transmitters, and examines the evolution of key issues such as AML, agent liability and enforcement actions. The report presents recommendations for money transmitters hoping to better prepare themselves for upcoming compliance challenges.

Money transmitter companies (MTCs) range dramatically in size, and therefore have very different technology and business process requirements. However, due to the risk of these services being used for illicit purposes, all MTCs face the same strict regulatory requirements. Among the greatest challenges to MTCs are that they face different regulations from various states, there is little organization within the industry to establish best practices, and there is uncertainty regarding future regulatory mandates. Money transmitters view their compliance efforts as competitive differentiators, particularly in terms of cost advantages they can derive from meeting compliance mandates effectively. As such, homegrown technology systems for compliance have permeated the industry. Vendor systems have begun to gain some traction with smaller money transmitters only recently, especially as they offer tools specifically to allay bank concerns over money laundering.

"Despite the fact that AML issues and related regulations pertaining to money services businesses, including MTCs, have been a priority for regulators since 2001, industry participants agree that regulatory responses are still a work in progress," says Eva Weber, analyst with Aite Group and author of this report. "Obligations around data security, privacy, anti-money laundering and payments require constant monitoring, and money transmitters of all sizes should plan for regulatory impact. Not surprisingly, it is often the unknowns facing the industry - rather than overly prescriptive regulations or overzealous regulators - that concern institutions the most."

This 16-page Impact Note contains three figures and three tables. Clients of Aite Group's Retail Banking service can download the report by clicking on the icon to the right.

Related Aite Group Research:

* Trends in Anti-Money Laundering Compliance: Evolving Practices and Strategies
* Resources for Anti-Money Laundering Compliance: Retail Banks on Technology and Staffing Trends
* Competing in Money Transfers: A Market Overview