Increasing AML Measures ‘Raise Stakes for Organisations’

BankersAccuity has released an industry perspective, entitled ‘Lessons Learned in a Year of Increasing AML and Bribery Compliance Scrutiny and Enforcement’. The report examines important trends in anti-money laundering (AML) and anti-bribery corruption (ABC) compliance; reviews an increasingly stringent global regulatory landscape; and offers key lessons in how firms can best demonstrate compliance through processes and technology.

The report, part of the company’s on-going Viewpoint series, says that in an era of enhanced regulatory scrutiny, larger fines and the on-going internationalisation of AML and ABC regulation, companies are faced with increased risk and greater challenges to achieving and maintaining compliance.

During the past year, key events and developing trends have offered insight and important lessons for firms seeking to avoid participation in illicit financial transactions. At the same time high-profile enforcement actions following violations of the US Foreign Corrupt Practices Act (FCPA), the Bank Secrecy Act (BSA) and other mandates have highlighted regulators’ determination to heighten oversight and combat illicit activity.

“Corporations and financial institutions face a daunting task in effectively addressing the growing corruption and bribery risk they face,” said Hugh Jones, president and chief executive officer (CEO) of BankersAccuity. “Yet, by gaining a better understanding of the entire compliance landscape and applying this to the data and technology systems they deploy, corporations and financial institutions alike can take great strides in winning the battle against money laundering, bribery and corruption.”

The report says that lessons learned from the past year of AML and ABC regulatory activity and global trends include:

• The fight against money laundering is turning international, and regulators are stepping up their games with high-profile fines against big-name firms.
• High profile examples include Wal-Mart, Johnson & Johnson and Diageo, all of which have been fined or are under investigation for FCPA violations, shows that being a large, respected multinational corporation offers little or no additional protection from scrutiny.
• Increasingly, regulators such as the US Department of Justice are focusing on financial institutions’ lax compliance standards and systems.
• The current geopolitical landscape increases the need for effective Know Your Customer (KYC) due diligence. The Arab Spring is a key example of this in action.
• The role of the chief compliance officer is becoming elevated within corporations and financial institutions.

According to Jones, technology can play a key role in ensuring AML and ABC compliance by automating and expanding screening and reporting. However, he adds, “regardless of the data and screening software that an institution has in place, there will always be potential for individuals internally to intentionally misuse the system. What’s important is that firms take a holistic and committed approach to making compliance an active part of their culture and daily operations.”

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