Having just returned from the ACAMS 14th Annual AML and Financial Crime Conference in Las Vegas, I remain puzzled on how some seem to be stuck on their positions, despite information that clearly show improvement and progress.
Perhaps it is simply a case of the proverbial “glass half empty or full.”
No credit for progress?
My last posting, “Is Anybody Listening?,” covered the recent Department of Justice edict (the “Yates Memo”) that threatened corporations that fail to offer up individual wrongdoers in order to get credit for cooperation.
At the conference, after hearing from several high-ranking government officials on the clear commitment of the private sector toward AML challenges, it continues to frustrate our community to hear some policy leaders criticize without pointing out the fact of documented success.
Also, many should realize that you can still call for compliance improvement while admitting your own shortcomings, whether you are regulators, law enforcement, or policy/legislative leaders.
I have maintained all along that the AML community is comprised of both the private and public sectors—and that we are stronger when we partner.
Issues from the conference
Our conference was the largest AML program in history (I should know—so old that I have been to, or created, most of them) and included a much broader category of AML professionals than when this area was first developed.
We had representatives from the insurance, securities, money-service business, and gaming industries to go along with traditional banking audience. So, anti-money laundering remains a tremendous growth area.
The issues, however, tend to be very similar:
• Finding qualified staff
• Obtaining appropriate resources
• Administering targeted training throughout an organization.
• Staying out of trouble
What people are thinking
The conference participants had many opportunities to express their views and we also provided them with results from earlier surveys. Here are some of their responses:
• One says up, one says down. 86% said they have received differing directions on the same issue from bank examiners from different regulators. When I posed this question and the result to our regulator panel, the response was, in part, that different regulators are looking for different things when examining for compliance.
I leave to others to decide if that answer is sufficient.
• Where does buck stop? When asked the controversial question, “When things go wrong at an institution, and there is a systemic breakdown of the AML program, in your opinion, which individual(s) should be held accountable?”, the audience was split—30% each for:
• The board of directors
• The first line of defense
• The AML/BSA Officer
Derisking. Returning to the infamous “derisking” debate, we asked the audience, “In the last year, have you exited a group of customers because”:
• You were concerned as to whether you could manage the potential risk presented by these customers—41%.
• You were concerned about the regulatory scrutiny that comes with having these customers (even though you could manage the risk)—59%.
Clear to me that we all have quite a bit of work to do…
ACAMS also worked with LexisNexis Risk Solutions on what has become an annual survey and I just want to highlight a few responses of note. For example, the continuing challenge of determining risk via a “risk assessment” was covered. As one of our panelists pointed out during the conference, risk assessments are actually not required but you neglect using a process to identify risk at your peril.
The respondents told us that 51% still use a manual spreadsheet or document for their risk assessment and that it takes, on average, 10 weeks to complete a risk assessment. Not surprisingly, we also learned that the risk assessment process is challenging because of “changing/unclear regulatory expectations.” (Note: The survey will be available to ACAMS members in late October.)
Whether fact or not, should we not formally address this concern?
• The survey also looked at the upcoming beneficial ownership issue (which I will cover when the regulation is final) and 76% say they are already gathering beneficial ownership identification information despite no rule in place.
* To end on a positive or glass half full note, ACAMS announced our own survey on AML compensation from 2014 and one clear outcome was heartening—AML professionals, despite many challenges are proud of their careers and the work they do.
Now if only others would get that .
*From “Smackwater Jack” a Carole King song. Just saw the play “Beautiful—the Carole King Musical” and it was simply amazing and inspiring.
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