I have approached my part in the AML community from Day 1 as a partnership. I have tried to express that vision in this publication no matter what the issue.
Whether stressing the need for examiners to recognize why we have AML requirements or for the private sector to be rational in their recommendations or complaints, there can be no progress without communication.
Communication is not one side making demands or creating their own premise. Instead, communication is a dialogue that is open, honest, and factual.
In addition, the AML infrastructure only succeeds when there is cooperation. We have seen much evidence of cooperation in AML over the years, especially after 9/11 and dealing with such horrific crimes such as human trafficking.
I remain optimistic about our community when we see law enforcement working closely with the financial sector and both groups reaching out to other organizations such as the anti-trafficking nonprofit organization Polaris, as they share information on actions that can be detected and reported along with public service announcements to a broad part of society.
Changes to laws, regulations, or guidance can also only occur with consensus by stakeholders.
Consensus does not mean simply supporting what one side says will solve the problem, nor does it mean if a goal is too hard we move on.
No, consensus means rolling up our sleeves, being candid about the problem, and being open to a result even if you do not agree.
All too often when we discuss change, we don’t invite everyone to the table and this is occurring in BSA or AML reform. If some are left out, change is doomed to failure.
So, the large financial institutions need to acknowledge the community banks. And both bank groups need to note money-service businesses, fintech companies and all other parts of the financial sector. This is clearly not happening as of this writing.
Also, our law enforcement partners must have a voice—but not the loudest or only view on items such as AML data.
Likewise, the regulatory supervisors must be consulted, but not given extensive deference on what constitutes a properly run AML program.
All parts of the community must work together.
We can work it out.
Issues to ponder
There are a number of proposals under consideration, and several ongoing projects in the AML area in 2018. However, it is unclear what has traction due to the uncertain—to say the least—environment that engulfs the U.S. for so many reasons.
Obviously the CDD/Beneficial Ownership rule is now final and time will tell how the examiners rate institutions on compliance with this new comprehensive requirement. ACAMS and the World Bank are continuing to address the challenges faced by NPOs in retaining essential services. Possible legislation in AML could include changes to SARs, CTRs, technology, and information sharing.
For the above three areas of focus, there is some room for improvement, but also reasons to be optimistic.
For CDD, we have heard that the examiners will work closely with banks to get things right and we have already seen some changes to previous guidance after the government listened to a number of institutions and corrected some unforeseen problems.
The continued dialogue facilitated by the World Bank and ACAMS is moving forward but needs to advance more swiftly. There is broad consensus on ensuring that humanitarian groups can assist those in desperate need but we need to cooperate by acknowledging when we are preventing improvement.
I am confident that day will come … and soon.
For the legislative process, I can say that working together is much more difficult but “success” is not insurmountable. Success to me means changes that retain the mission of AML (getting timely information to law enforcement) but by becoming more efficient, reasonable, and logical.
We Can Work It Out…
* Recorded by the Beatles in late 1965 and reached #1 in the U.S. in January 1966 for three weeks. It was covered by such disparate acts as Humble Pie, Stevie Wonder, and the Slackers. Another relevant line that I like is, “Try to see it my way, Only time will tell if I am right or I am wrong.” AML community, that is from me to you on AML/Financial Crime Reform.