Terrorism has changed the world over the last five years, and nowhere is that more evident than in the need for anti-money laundering (AML) software for financial services companies in the United States. Federal regulations have spurred AML solutions in this country as insurers and other financial services deal with global financing issues, some of which help finance terrorist activities.

Neil Katkov, group manager, Asia research for Celent, maintains the AML needs of insurance carriers have not been as great as the banking and brokerage sectors, because transactions for carriers–policy applications, claims, and payouts–generally are on multiday batch cycles, which allow carriers more time to analyze suspicious activity.

Regulators have seen less risk for money laundering in the insurance sector, points out Katkov, and have not come down as hard on carriers. That has led to a comfort level for insurers, resulting in the implementation of what Katkov views as simpler solutions, often built in-house. He believes the mood of regulators could change, though, requiring more stringent procedures from the insurance sector. Regulators may focus more attention on the insurance industry, he indicates, as the Financial Action Task Force and other international bodies have detected increases in money-laundering activity in the insurance sector over the past few years.