implementing compliance enhancements to continuously improve AML AND TRANSACTION monitoring programs

By Ehi Eric Esoimeme, Managing Partner, Consultant and Trainer at E-Four and AAF

Our banking system’s vulnerability to money laundering is once again a focal point of debate in the wake of the Financial Conduct Authority's report into HSBC that cites examples of poor controls, including failing to spot suspicious activity on the account of a construction director who also played a leading role in a criminal gang trying to steal millions of pounds by setting up fake companies.

For Financial institutions to adequately monitor and detect suspicious and prohibited activity, it is important that they implement compliance enhancements to continuously improve their AML and transaction monitoring programs through significant investments in AML staffing and technology, including:

• Enhanced Surveillance System: Financial institutions should upgrade their AML surveillance monitoring system across all of its separate business lines to an upgraded system. The new system should be able to provide enhanced grouping and alert features, thus strengthening the ability to monitor transactions between related accounts.

• Accountability: Financial institutions should enhance their oversight of AML monitoring and also implement back-testing protocols, which help enhance the quality of the alerts and reduce false positives.

• Alert Handling, Documentation, and Inventory Tracking: Financial institutions should enhance their minimum standards for alert handling, documentation and tracking. The enhancements should include, among other things, detailed written instructions on how to handle alerts, document a review, and escalate an alert through the proper personnel channels.

• Enhanced Training and Minimum Standards for Key AML Monitoring Staff: In order to enhance the quality of alert handling, financial institutions should set minimum experience requirements for its AML monitoring staff and provide them extensive training. E-Four and AAF is an Accredited Training Provider for the Global Academy of Finance and Management (GAFM) and the American Academy of Project Management (AAPM) certification programs. With this partnership, E-Four and AAF offers various GAFM® and AAPM ® certifications in conjunction with its existing/relevant training programmes and courses. GAFM® and AAPM ® courses are TUV Accredited, ISO 9001 Accredited, ISO 29990 Accredited, AABFS Accredited, CHEA Standards, EU Compliant Level VII, and ACBSP Articulation Awarded Credential. Currently, E-Four and AAF offers the following GAFM® and AAPM ® certifications:

• CFC Certified in Financial Crimes and Fraud Prevention™
• CAMC Certified Anti-Money Laundering Consultant ®
• CDDP – Certified Due Diligence Professional
• CAMA – Certified Anti-Money Laundering Auditor™
• CCO Certified Compliance Officer ™
• CMRA Certified Money Laundering Risk Analyst ®
• ChFI Chartered Fraud Investigator ™

E-Four and AAF also offers the following training courses with the Global Academy of Finance and Management (GAFM):

1. Identifying and reducing the risks associated with senior political figures, often referred to as “politically exposed persons” (PEP).
2. Recognizing and mitigating the risks associated with cash-intensive businesses and entities.
3. Managing the risks associated with transactions involving domestic and foreign business entities.
4. Managing the potential risks associated with relationships with third-party entities that process payments for telemarketers, online businesses, and other merchants (collectively "merchants").
5. Managing the risks associated with transactions involving accounts held by nonresident aliens (NRA) and foreign individuals
6. Recognizing and mitigating the risks associated with Money services businesses (MSB).
7. Managing the risks associated with accounts of nongovernmental organizations (NGO) and charities
8. Managing the risks associated with offering domestic correspondent account relationships
9. Managing the risks associated with foreign correspondent banking
10. Managing the risks associated with private banking relationships for both domestic and international customers.
11. Managing the risks associated with payable through accounts (PTA)
12. Managing the risks associated with trust and asset management services
13. Managing the risks associated with trade finance activities
14. Recognizing and mitigating the risks associated with professional service provider relationships
15. Managing the risks associated with privately owned automated teller machines (ATM) and Independent Sales Organization (ISO) relationships
16. Managing the risks associated with prepaid access products
17. Managing the risks associated with electronic banking (e-banking) customers, including Remote Deposit Capture (RDC) activity

Upon successful completion of any of this training programmes, the participants will receive a Certificate of Participation with assigned CDP Points from the Global Academy of Finance and Management (GAFM).

• Quality Assurance: Financial institutions should assess the quality of the AML monitoring analysts’ work and substantive accuracy of the disposition of the alert under their quality assurance system. Findings should be reported monthly to designated senior officers.