AML in the Current Environment – Three Strategies for Remaining Compliant

November 2, 2020

AML in the Current Environment – Three Strategies for Remaining Compliant

Financial institutions will find it particularly challenging right now to ensure that staff understand the full details of their AML compliance program

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In this first in a series of articles, Justin Muscolino, GRC Solutions' Head of North American Training Operations, considers the challenges the situation poses for remaining compliant. He offers three ways to meet them.

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The changes taking place in and to our work environments in 2020 have come to represent a “new normal”. Financial institutions will find it particularly challenging right now to ensure that staff understand the full details of their AML compliance program. While these programs are all too easily overlooked in the current circumstances, we need them more than ever.

Most staff are still working from home, far from their place of work. But does working from home mean that we no longer have to fulfill our work responsibilities? The obvious answer is no. Staff need to be reminded of their obligations when it comes to carrying out their job functions.

The same logic applies to our AML obligations. Staff need to be continuously trained and to have their knowledge refreshed, to reinforce the key elements of an AML compliance program, and to be reminded about what could happen if it is not followed.

When I look at AML training, or any training for that matter, I think of the need to highlight where any gaps or risks may be occurring and the importance of remediating them as soon as possible. This means that an organization must review each component of its AML compliance program and check whether its staff are following through on them.

So, the big question is, what do financial institutions have to do to stay compliant? Let us look at some of the goals of a solid program:

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1) Reporting

Having a solid system in place will determine and assist in spotting red flags of money laundering. If staff are not looking at these reports or issues are not being fixed, this could put a financial institution in a bad situation

2) Staff monitoring

If staff members are not focusing on any red flags that are becoming routinely noticeable, this could really hamper or increase the risks in your organization.

There needs to be follow-up with staff members to ensure they are performing their roles, and to see if refresher training, based on real-life circumstances of non-compliance, is necessary.

3) Client evaluation

This should never stop, even in the current environment. You need to perform due diligence on clients by asking the appropriate questions and looking for any obvious patterns of impropriety.

These are just a few of the areas that can pose real threats to a financial institution. There are many more.

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The point is that everyone bears responsibility for compliance obligations and need to know that they are accountable for their actions, one compliance issue alone can result in years of regulatory scrutiny or even fines. Training is an important element to address money laundering risk for the following reasons:

• Educate staff on current issues in the environment and the impacts on your financial institution.

• Refresher training should be provided periodically, I think more so now.

• Keep tabs on your staff and make sure they understand the risks, if it’s not virtual training or e-learning, try adding some teaching lessons during your periodic meetings.

Remember, compliance risks don’t decrease when other negative occurrences hit the environment. On the contrary, they increase. When staff all work remotely, scattered, away from each other and their offices, this can heighten the risk that there is insufficient monitoring of compliance risks and inertia about addressing and managing them. Training can help to reinforce the need to make our staff proactive about their compliance obligations.

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