He says it would be possible to build a completely secure system, but notes that such a system would be practically useless in the world of correspondent banking, where everything revolves around swift execution. The scale of the business is tremendous. In the 21 business days so far this year, the main US clearing house for interbank payments, has handled just under five million transactions. But banks can t just ignore the government s desire to stamp out money laundering. As with other security decisions, says Rica, the real trick is to define an acceptable level of risk .
Reputational damage is one of the most talked-about risks connected with the practice.
The media leap upon each fresh instance of an apparently corrupt financial system with glee , and a bank s good name could be permanently tarnished. Wachovia s Crandall concurs. It s something that affects other people, unlike privacy violation, for example, which is a much more personal thing. If a customer was asked to choose between less privacy, but greater curbs on money laundering, or more privacy, and weaker money-laundering controls, they would choose in favour of privacy, she says. Privacy may be less of an issue in correspondent banking, but the growth of e-banking is widely expected to open up a new front in the war against money laundering, where knowing your customer is a central difficulty.