Although the Office of Foreign Assets Control's list of suspected terrorists and hostile nations has grown to over 3,500, and the Patriot Act mandates securities firms check new accounts against it, only 1,000 brokerages have watch-list-screening solutions.
That number is small compared to the 18,000 banks that have these solutions in place. And only 300 insurance companies have adopted systems thus far. According to a recent Celent report entitled, "Know Your Customer," many firms have yet to adopt a solution.
An estimated 6,000 brokerages, 3,200 banks and 4,400 insurers in the United States have not employed watch-list screening, notes the report. The reasons for lack of adoption range from the perceived lack of risk to the lack of enforcement.
Overall spending on Patriot Act compliance by financial institutions between 2002 and 2004 will reach $10.9 billion, estimates Celent. This includes technology, audit, training, and personnel. Spending on anti-money-laundering solutions will account for 6 percent or $695 million of the total expenditure. Making up the bulk of this spending will be screening solutions.