Financial services companies in Asia are set to spend record amounts upgrading software systems they use to monitor illicit fund flows (IFFs) according research firm, Celent.

It says the companies are also struggling to recruit and retain quality anti money-laundering (AML) and know-your-customer (KYC) specialists.

Investments planned

Spending on technology for AML and KYC may increase from $260m to $300 million by 2016 in Asia, according to Celent.

The research company says software upgrades will help some banks offset rising staff costs, following 20 per cent increases in salaries for experienced AML specialists over the last three years.

Recruitment drive

Media reports in Singapore meanwhile say many banks are taking on more staff or investing in software solutions to drive up compliance and meet new regulations.

Regulators in Hong Kong and Singapore now require banks to monitor tax evasion, with tough penalties for those that fail to track IFFs.

HSBC Holdings meanwhile has said that it has hired more than 2,200 people globally, mainly for financial crime compliance, in the first six months of 2015.