Seizure of criminal assets - which are estimated at £5.5bn - is impeded by a flawed system with bottlenecks at every stage. These are now being targeted by Sir Stephen Lander, former head of MI5 and the chairman of Soca. Sir Stephen has his work cut out.

The intelligence system that is designed to spot criminals and terrorists when they move or handle their assets presents the first challenge. The financial community is obliged by the Terrorism Act and the Proceeds of Crime Act 2002 to watch out for anomalous movements of money or suspicious activities by individuals. Banks have invested in screening systems and training. But the volume of transactions that pass through large institutions vitiates meaningful scrutiny. Small amounts handled by terrorists, in particular, slip through a net designed to spot large, suspicious movements.

So, instead of the suspicion that alerts authorities to a crime, banks use blacklists of known criminals or terrorists. They will also respond to alerts from law enforcement agencies about a criminal on the loose or a country known to be harbouring terrorists. Retrospective action is more likely to deliver evidence for a prosecution than nip a crime or terrorist act in the bud.

This does not inhibit banks from reporting suspicious behaviour. They are advised to report more rather than less, as they will pay a heavy price in reputation and fines later on if one slips through their net. These suspicious activity reports (SARs) are tested against databases held by other government departments. Recurrence of names or forms of criminality help predict a criminal's behaviour.

Political pressure, concern about terrorism and changes in the law have resulted in a mushrooming of suspicious reporting. The number has risen from 15,000 five years ago to about 250,000 today. Police systems for handling the reports, let alone acting upon the information, buckled under their weight and banks started to protest that their reports were going unheeded. Worse, an inefficient system of consent meant that banks were losing business and customer confidence.

This occurred because banks must wait for police to allow them to handle the affairs of a customer who has been reported to the police. Police are supposed to take a maximum of a week responding to the report by producing the legal consent form. They frequently took longer. Restless customers wanted a response from the bank but the bank was barred from telling the truth in case the customer was alerted. Complaints reached such a pitch that the government axed the responsible agency, the National Criminal Intelligence Service, and subsumed its responsibilities inside Soca in April. Soca has reduced the average waiting time for "consents" to two days by adding staff and computing power. It has also sought to placate the financial community by bringing them closer to the SARs process. Two committees composed of UK bankers have been created to meet Soca staff and hear how the SARs investigations are going.

Improvements in the systems are raising morale in the financial community. But the political demand for a higher return on their investment in anti-money laundering services has yet to be met. Sir Stephen must collect an annual £250m of seized criminal goods in three years if he is to meet a target set by Tony Blair, prime minister.

This presents a formidable challenge, not just to Soca, but to police and customs officials. They use the SAR to investigate and seize criminal assets. But these are complex investigations demanding considerable financial literacy and police competence to handle them is questionable. Police win more brownie points by bringing violent criminals to book than finding the white collar criminal and his money.

For long-term recovery of criminal assets, organisational change will not be sufficient. Culture must also advance if the police service is to push back the acquisitive crime wave that threatens to engulf us.