The UK financial services sector faces potential fines of over £230m because its document management standards are inadequate to support effective anti-money laundering measures, according to new research.

The finding is from Anacomp, a company which focuses on the current state of document and records management systems and processes in the financial services sector.

The research showed that only 43.5% of financial services companies have effective document management policies and procedures in place.

Chris Haden, managing director, Anacomp UK, said: "The situation remains seriously inadequate. The underlying document and records management is a fundamental element of anti-money laundering compliance."

The FSA has already handed out a series of fines to financial institutions for not adopting sufficient safeguards against money laundering.

Anacomp's research identified that the average fine received from the FSA by institutions specifically falling short on the anti-money laundering issue is currently over £1m.

Hadden added: "Money laundering will not disappear as a priority regulatory issue for the FSA. There really is no option for financial services companies but to move swiftly to avoid financial penalties and reputational damage."