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Caribbean Indigenous Banks Anti-Money Laundering Survey. An analysis of the local challenges. Patricia Hamilton CEO Caribbean Association of Indigenous Banks Inc. -. Know your customer (KYC) . Account Opening. -. Anti. money laundering standards and procedures. An Integrated Approach.

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caribbean indigenous banks anti money laundering survey

Caribbean Indigenous Banks Anti-Money Laundering Survey

An analysis of the local challenges

Patricia Hamilton

CEO Caribbean Association of Indigenous Banks Inc.

an integrated approach


Know your customer (KYC)

Account Opening



money laundering standards and procedures

An Integrated Approach

Compliance Requirements

International, Regulatory, Industry, Third Party, Internal

Anti-Money Laundering Strategy

Business and organisation

Processes & Initiatives


Investment suitability

Risk assessment

Security & technology usage

Tax etc.

Investent suitability

Training and Awareness Program

Management Commitment


Administrative and end


policies and procedures




Transaction Monitoring/

Tactical short term

AML Reporting

Tracking Processes



Cost of Compliance

management support
Management Support

AML is a key value; a function of the integrity of the company and as such must be promoted by directors and management.

Key values are supported by management behavior:

- Visible attention and appreciation

- Agenda item in board meetings

- Element of staff assessments

- Available budgets for IT, training etc.

- Status & powers of the AML officer

the tone on top
The “tone on top”

Most consider management to be supportive.

centralized vs decentralized compliance function
Centralized vs. Decentralized Compliance Function



  • Limits differing interpretations
  • Limits data entry error
  • Quality Control is easier


  • Skills required of staff
  • Backlog



  • Skill set applied to entry


  • Quality Control
  • Enforcement
management of aml efforts should come from throughout the organization
Management of AML efforts should come from throughout the organization
  • Establish a “culture of compliance”
    • Set tone at the top
      • Top management is ultimately responsible for compliance
    • Business is responsible for day-to-day compliance
    • Compliance management plays a key role in corporate governance, monitoring and advisory functions
technology as a compliance enabler
Technology as a compliance enabler

Rules Refinement

Customer Profiling



Where most Caribbean banks are

Enterprise Profiling

Integrated Organization

The above maturity model depicts how Compliance systems can evolve

Advanced Monitoring

support systems
Support systems

Just above half report adequate manual & technological support.

use of technology for aml
Use of Technology for AML

77% have either invested or have plans to invest in the future.

capabilities of transaction monitoring software
Capabilities of Transaction Monitoring Software

A= Client Profiling

B= Transaction Profiling

C= Historic Client Behaviour

D= Pattern Recognition of Transactions

E= Peer Grouping

F= All of the Above

Most respondents report that their transaction monitoring system has all 5 features.

accountability a necessity
Accountability- A necessity
  • The key challenge for many financial institutions is to sustain the effectiveness of their AML programs on an ongoing basis.
  • An AML Accountability Review addresses issues related to corporate risk management and the legal liability of corporate directors, officers, supervisors and staff in managing the reporting cycle for suspicious transactions.
familiarity with consequences for breaches
Familiarity with consequences for breaches

Most staff are considered to be familiar with consequences for breaches.

how do we rank
How do we rank?

Experience in other jurisdictions shows that a common problem is a lack of skilled and experienced staff with anti-money laundering expertise.

How do we rank?

numbers of staff dedicated to aml
Numbers of staff dedicated to AML

Most banks employ 1-5 staff whose primary duty is AML. The majority of these are responsible for Transaction Monitoring.

the skill set of staff
The skill-set of staff

Although in small numbers, staff are considered to be adequately skilled in AML & CFT.

the ideal operational infrastructure
The ideal operational infrastructure



Account / Transaction


Policy & Procedures

Risk Assessment

Organization & Controls





Record Keeping / Retention








Training / Testing

budgetary expenditure
Budgetary Expenditure

33% have spent over US $100,000 on Transaction Monitoring.

specific use of budgetary funds
Specific Use of Budgetary Funds

A= Increase in staff

B= Enhancements to existing transaction monitoring system

C= Implementation of automated transaction monitoring system

D= Training

E= Conferences

F= Other

Most respondents reported a combination of methods B, D & E.

methods for indentifying suspicious activity
Methods for indentifying suspicious activity



A= Reliance on employees’ vigilance

B= Review of exception reports

C= Internally developed transaction systems/exception reports

D= Vendor supported automated transaction monitoring system

Most respondents (28%) reported a combination of methods A, B & C while 17% reported using all four methods.

policies procedures
Policies & Procedures

However, 50% of these apply only to the Compliance department.

essential elements of effective aml
Essential Elements of Effective AML
  • Management support, commitment, accountability, “tone at the top”

2. Effective governance structure to oversight line of business functions

3. Comprehensive and actionable policies and procedures to reflect global and country specific requirements

4. Appropriate compliance communication, awareness, reporting, and education plan

5. Process to identify and implement regulatory requirements timely and effectively

essential elements of effective aml cont d
Essential Elements of Effective AML, cont’d.
  • Monitoring/self-assessment programs to effectively detect violations and weak control systems
  • Reporting and communication processes to ensure the status of significant compliance issues are communicated
  • Tracking process for corrective actions required due to results from monitoring programs, complaints, Internal Audit, and regulatory reports
  • Effective training programs
  • 10. Involvement of compliance function in the development of new products and services
caribbean indigenous banks anti money laundering survey39

Caribbean Indigenous Banks Anti-Money Laundering Survey

An analysis of the local challenges

Patricia Hamilton

CEO Caribbean Association of Indigenous Banks Inc.