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How to Find Your AML Compliance Gaps

First, because AML compliance manuals have, historically, been an exercise in u201cjust get it doneu201d. We usually started with some template (Yes, I too am guilty of this) and then made some minor edits to u201cfit our businessu201d and then ticked this item off our very long to-do list.<br>

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How to Find Your AML Compliance Gaps

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  1. How to Find Your AML Compliance Gaps

  2. As an avid reader, my favorite genre is mystery. A good mystery writer will drop a clue now and then, just enough to keep me guessing and occasionally I may be able to figure out who did the deed once I reach The End. However, as much as I love a good mystery, a compliance manual should not read like one. And yet, sadly, so many do. Too many require the reader to hunt for the clues to a company’s anti-money laundering (AML) processes and policies and approach to risk analysis. Why are the manuals so badly written? First, because AML compliance manuals have, historically, been an exercise in “just get it done”. We usually started with some template (Yes, I too am guilty of this) and then made some minor edits to “fit our business” and then ticked this item off our very long to-do list.

  3. Second, because we hesitate to truly edit. Good editing requires cutting and we have this fear in compliance that to remove something that’s been working so far is a huge risk. This results in a compliance manual that changes little through the years except to get wider – like my waistline. This added girth is because the new AML directives, new money laundering trends, and the increased risk of AML fines and penalties add to our stress level. Consider these the cortisol of middle-aged compliance manuals. Finally, because every year more people are tasked to review it so we can demonstrate that “culture of compliance” – a few Board members, a lawyer, the new IT manager, etc. They each have to add their “two-cents”, then it gets approved and emailed to staff. Staff flick through it, underwhelmed, before putting it back on the digital shelf where it gathers digital dust.

  4. We need to change this. Why? Well, there are lots of good reasons to change but the one that counts is because auditors and regulators are actually reading these manuals now. And they don’t like mystery novels the way I do. But where to start?

  5. Have you ever been on a great journey? I know most of you have been on at least one hiking trail. Or maybe you prefer snow skiing. Or biking. Or you’ve been on a long road trip or exciting train ride. Whatever the journey you took, you will remember that the trip began before the trip began. And it began with a map. Here’s an idea, instead of it being a “manual” (i.e., boring, dull, a lot of CYA wording, and generally unhelpful), what if we refer to what we create as an “AML Compliance Map” – one we use to plan our exciting journey in the world of AML regulated services.

  6. That map may have been on paper and had multiple folds or it may have been on your device. Whatever the medium, there was a map. If you couldn’t read it properly, you risked getting lost. If the map was wrong, you definitely got lost. But the second you opened that map is when your journey truly began. How much time you spent studying that map and getting to know that map correlated to how successfully your journey ended. (And, think about it, when we get lost on a journey, do we pull out our car’s manual? No, we look at a map. Isn’t that what we want our staff to do if they get lost on their AML journey?) AML compliance is a journey. It’s an exciting one too if you approach it with the right mindset. Yes, some people think I’m insane because I enjoy AML compliance. I find it exciting and interesting. I truly enjoy the Know Your Client (KYC) aspects of AML compliance. Reviewing Client Due Diligence (CDD) is, to me, like meeting the stranger on the train on my journey that soon becomes a good, lifelong friend that I happen to do business with. Or, they’re the stranger that makes me want to change seats.

  7. If your flow charts cannot guide you through every conceivable situation to an acceptable risk analysis or decision to end the relationship, then that’s where the gaps are in your policies and procedures. And you want to find those gaps before a regulatory inspection finds them for you.

  8. Contact SILO Compliance Systems info@silocompliance.com Complete set available at www.silocompliance.com

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