KUALA LUMPUR (March 24): A survey of 36 executives from 18 leading Asia Pacific (APAC) banks has revealed that 88% of respondents anticipate terrorist funding to grow this year.

In the FICO survey released today in conjunction with the FICO Fraud Forum in Bali, Indonesia, FICO said respondents were also asked if recent terrorism events had increased the focus on counter-terrorism at their organisation, with 61% confirming that it had.

The US-based FICO offers a comprehensive modular set of solutions to fight money-laundering, fraud, terrorist financing, and to fulfill custom requirements for governance, risk and compliance.

It said that for 47% of respondents, financial compliance to fight terrorism this year will be largely focused on know your customer (KYC) and ongoing customer due diligence (CDD), with another 13% saying stand-alone efforts in counter-terrorism financing (CTF) are most critical in 2016 for their respective banks.

In the survey findings released today, FICO said that globally, banks take their recommendations for best practice on anti-money laundering and counter terrorism financing efforts from the Financial Action Task Force (FATF).

It said the organisation encourages countries, governing authorities and banks to take a risk-based approach in dealing with money laundering and terrorism financing. This risk-based approach requires ongoing review of customers and their transactions.

"While 67% of the respondents in FICO's survey believe they are fully compliant with FATF recommendations, only 48% of them follow the risk-based approach prescribed by the FATF. The difference represents a gap in understanding of full compliance," said FICO.

FICO Asia Pacific financial crime consultant Subhashish Bose said as terrorism becomes a more pressing threat to global peace, banks are expected to take greater social responsibility in the fight against terrorists.

"More than ever, this means that banks need to place higher emphasis on understanding and mitigating their exposure to terrorist financing risks," said Bose.

Meanwhile, FICO president in Asia Pacific Dan McConaghy said the traditional rules-based approach to addressing compliance and stopping terrorist funding is no longer sufficient.

"Financial institutions need risk-based controls and effective real-time monitoring of all customer relations, sanctions compliance, and even embargo regulations, in order to minimise the chances of terrorist groups using them to fund inhumane activities," said McConaghy.