Purposeful AML controls
I’d like to start by thanking the FCA, and in particular Mark Steward, for both the timing and content of his recent speech - The importance of purposeful anti-money laundering controls.
When you are building a new business with the tagline “purpose led consulting” which is focused around not only great regulatory advice, but also a genuine focus on purpose, a speech like this is an endorsement to everything you have been planning.
“Systems and controls that are purposeful, efficient and courageous in identifying suspicious activity are vitally important”
So, how do Mark’s words align to our philosophy?
Purposeful – purpose is key. We need to shift our focus back to why any of us in financial crime compliance do what we do. To prevent crime. It has become too easy to allow focus to drift to what we’ve always done, or what peers do. In many instances, so called “leading practice” has become de facto expectation even though it may not be proportionate, risk sensitive or relevant. Firms, consultants, and even the FCA have at times all been guilty of missing the purpose.
Efficient – we have to be truly risk based. If we’re going to achieve the purpose, we need firms to deploy effort where it really matters. The levels of investment in compliance do not currently realise sufficient return when it comes to prevention of harm to society. Of course, we have to note the difference between reducing cost and being efficient – the controls need to be effective, but they need to be proportionate.
Courageous – you sometimes have to break the mould. Even when firms know controls aren’t effective, it’s often deemed to be “safer” just to stay in line with the pack and not to rock the boat. We need to be bold. With a clear purpose, and a solid risk-based approach it is more than possible to do things differently.
“AML investigations are often complex because they are rarely transactional and require a systemic understanding of how a firm operates, its governance controls, its cultural habits, and the nuts and bolts of sometimes opaque systems.”
Mark notes the complexity of AML investigations, but the same can be said for AML solutions. Yes, there are standards to write, processes to define and frameworks to embed. But achieving purpose is much more challenging – it is subtle, it is behavioural. It’s about incentives and disincentives. It’s about everyone understanding the purpose.
We’d love to talk to you about where purpose sits in your financial crime framework and how we can help you to be efficient and courageous. Our focused mindset and vast experience has given us some innovative ideas that can help firms practically implement a control framework that demonstrates purpose. Get in touch contact@avyse.co.uk
