• Robert Prigge, CEO at Jumio


• 01.09.2021 10:30 am
#AML #compliance #training

It is estimated that between 2% and 5% of global GDP is laundered each year at a value of up to €1.68 trillion. It’s therefore not surprising that anti-money laundering (AML) rules are continually evolving, with businesses facing lengthy penalties or even criminal charges if they get them wrong. But getting it right can be challenging especially for highly regulated industries like banking, where rules differ by country or region. For businesses wanting to ensure they are on top of AML compliance, there are five critical components to ensure a successful and robust programme.

Having a dedicated compliance officer

By appointing a dedicated compliance officer who stays up to date with all regulations, develops and enforces a structured AML program, your company can ensure it is following government regulations and does not face disciplinary action from HM Revenue & Customs. The compliance officer will also oversee employee training on AML compliance and report to senior management. Without a compliance officer, your efforts will lack focus and put your company at risk.

Investing in training

AML compliance is a complicated subject, so how can you expect your employees to continue to remain compliant without support? You must train them regularly on the basics of money laundering and on developments in regulations. Whether online or in person, your training programme should be industry specific and highlight suspicious transactions to look out for. By making training mandatory, and led by your compliance officer, your employees can be the front-line defence against criminal activity.

Undertaking a risk assessment

Before you can educate your workforce, you must develop a strong risk assessment process. The way to do this is threefold: identify the company’s risk categories, analyse the data in the high-risk categories and update the risk profiles regularly. Effective risk management also means evaluating the ownership of client companies to ensure there is no hidden agenda.  

Implementing strong internal systems

It is also vital that you put in place strong internal controls including company policies, processes and procedures aimed at identifying and reporting any irregularities. This should include following know your customer (KYC) processes by practicing customer due diligence and researching new prospects thoroughly before starting a relationship.

Hiring independent testers

Lastly, your company is responsible for monitoring itself and putting measures in place to stay compliant. One of the measures is undertaking an independent audit. The audit should look at company financial activity reports, evaluate AML training, test transaction procedures and review AML policy manuals. By undertaking this step, you can identify problem areas which need correcting and enhance your reputation as an honest and ethical institution. 

While it may seem like a complex task, following these five steps will pave the way for an effective AML programme. Luckily, there are many advanced tools and solutions available to help you build your programme. By harnessing the expertise of specialist partners, you’ll save time, money and problems with regulatory agencies, making this not such a daunting task.