Financial crime remediation of systems and controls remediation is the process of correcting deficiencies in your financial crime systems, controls, policies and procedures. It’s a critical undertaking, as effective financial crime controls are essential for mitigating financial crime risks and protecting your organisation's reputation and bottom line.
Welcome to the final instalment of our financial crime series, where we outline what financial crime remediation entails, why it matters and how to navigate the process successfully.
Why remediation is essential
Remediation is not just a procedural fix; it's a strategic commitment to bolster your organisation's financial crime controls and procedures, and fulfil for existing clients the gaps that exist from previous failures to get it right the first time.
Recognising its significance is vital, especially in a landscape where regulatory scrutiny is relentless. Remember, the costs of financial crime transcend any compliance expenses you might incur, with organisations falling foul and enduring monetary losses, reputational damage and regulatory fines.
How you can navigate the process
While the specifics of remediation vary, certain steps are integral to the process. Let’s explore them:
1. Identify
The process begins by uncovering the root causes of any financial crime system and control deficiencies and identifying gaps in existing evidence. You should conduct a comprehensive review of your organisation's policies, procedures and training materials, as well as review historic data, information and processes, and engage with employees to find out more about why there are weaknesses, what's causing them, and what needs to be put right.
2. Plan
Armed with insights into deficiencies, you can develop a detailed, specific, measurable, achievable, relevant and time-bound (SMART) remediation plan, which will become your blueprint for all corrective actions.
3. Implement
Timely and effective implementation of your remediation plan is critical. It will likely involve modifying financial crime policies and procedures, providing additional employee training and investing in cutting-edge financial crime technology. It almost always involves retrospective activity to close gaps in existing evidence, client file documentation, governance decisions and audit trails.
4. Monitor
Post-implementation, you must vigilantly monitor the plan's effectiveness, conducting regular audits to ensure any identified deficiencies have been effectively addressed. It's crucial to recognise the process isn't over until it's over, as you or the regulators may unearth additional underlying weaknesses or challenges, further extending your remediation journey.
The role of external support
Embarking on the remediation path demands considerable resources. While a Chief Compliance Officer (CCO), Money Laundering Reporting Officer (MLRO) and other relevant heads of department are vital players, external support can be indispensable. Engaging reputable consultants can help you navigate remediation challenges by leveraging the expertise of specialist teams and tapping into industry best practices in regard to processes and methodologies. Not only to get the necessary work done, but to do it in an efficient and effective way, and avoid unnecessary costs and wasted time.
Avoid the pitfall of getting help after you've missed deadlines or not met the required standard, and engage with professionals from the outset of your remediation journey to enhance the effectiveness of the process.
Don’t bury your head in the sand
At Brighter, we have a proven track record of successfully helping clients navigate the remediation process. We'll work with you to develop and implement a tailored plan and be there in the thick of it to support you every step of the way. Contact Simon Davis today, for a confidential chat with one of our experts.
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