Are You Meeting Your Financial Crime Obligations, Are You Falling Short, or Are You Not Sure?

In the ever-evolving landscape of financial crime prevention, anti-money laundering (AML) and counter-terrorist financing (CTF) compliance is more critical than ever. The consequences of falling short on financial crime systems and control obligations are not just regulatory; they extend to the core of your organisation's reputation, financial stability and the well-being of key stakeholders.

However, some organisations may be unsure whether they meet their financial crime systems and control obligations. There are several reasons for this, including:

Lack of awareness

Some companies may not be aware of their financial crime obligations in the first place, which is especially common among smaller businesses and those operating in low-risk industries.

Complex regulations

Let's face it: financial crime regulations can be complicated, making it difficult for organisations to ensure compliance.

Lack of resources

Smaller businesses may not have the resources to invest in financial crime compliance, which can include hiring and training staff and the cost of implementing technology solutions.

Rapidly changing landscape

New regulations and guidance are being introduced regularly, making it challenging to keep up with the latest requirements.

Does this sound like you? 

As outlined in part one of this series, falling short on financial crime systems and controls obligations can have far-reaching consequences, including financial penalties, reputational damage and legal ramifications.

Establishing where you are is vital to help you: 

• Identify your strengths and weaknesses 
• Prioritise your improvement efforts 
• Establish a baseline to measure progress over time 
• Demonstrate to regulators that you’re taking financial crime compliance seriously.

Let’s get started 

To start effectively analysing your financial crime controls, follow these steps:

1. Conduct a risk assessment

A risk assessment will help identify the specific risks your organisation faces so you can develop appropriate controls to mitigate them. When conducting a risk assessment, consider as a minimum these factors:

• The nature and size of your business
• The products and services you offer
• The geographic locations where you operate
• Your customer base
• The types of transactions you process.
  
  

2. Review current policies and procedures

Once you’ve conducted a risk assessment, review your current financial crime policies and procedures. Make sure they are up-to-date and being effectively implemented. Your financial crime policies and procedures should cover aspects including anti-money laundering, counter-terrorist financing, anti-bribery and corruption, tax evasion, screening, politically exposed persons, customer identification and verification, transaction monitoring and suspicious activity reporting.

3. Talk to your team

Speak to your people to get their feedback on financial crime controls so you can identify areas where they need more support. Your staff are on the front lines of your organisation's financial crime defences, so it’s crucial to get their input on how your controls are working (or not). Also, ask your staff if they fully understand the financial crime policies and procedures and have suggestions for improvement.

4. Monitor your transactions

Review all your transactions for suspicious activity, which you can do manually or using automated transaction monitoring systems. The latter can help you to identify suspicious activity that you may not be able to detect manually.

5. Test your controls

Regularly test your financial crime systems and controls to ensure they're effective. You can do this by conducting internal audits, compliance reviews or hiring an external third-party specialist.

By following these steps, you can start analysing your financial crime controls and identifying any areas for improvement. Not only will this help you ensure you're meeting your financial crime obligations, but it will also go a long way in protecting your organisation from the risks of financial crime. Join us for the next part of our series, which will explore what you need to do if your organisation catches the attention of the regulator…

Looking for additional support? 

If you're unsure about your financial crime obligations, falling short or just need reassurance, Brighter can help. We're not just experts; we're your partners in navigating the complexities of financial crime compliance. Contact Simon Davis today to discuss how we can help you strengthen your financial crime framework, systems and controls and safeguard the future of your organisation.