There is a misguided assumption that the more money you throw at Anti Money Laundering risk the more effective you’ll manage it.
This is far from the truth when looking to manage anti money laundering compliance.
You have to spend money, but you have to spend it smartly. The mistake that reporting entities in New Zealand continue to make is to spend money on headcount. They are throwing more and more and more people at the problem.
Lawyers, Accountants, Real Estate agents and financial institutions are dramatically increasing their cost of compliance with increased staffing or worse, moving the focus of existing staff to manage the heavy lifting. Most of these folk are trying to make sense of the risk to their organisation and endeavouring to protect the customer experience…all whilst trying to manage their day job. This choice as a way to manage anti money laundering compliance will see companies fail.
Despite the massive increase in headcount the same failures occur. Why? Because it’s the way businesses manage customers that’s absolutely critical. If you can’t get a single comprehensive view on each customer relationship and use the data to drive dynamic risk profiles and alerts then it doesn’t matter how many people you have, you’re going to be in a continuing state of non-compliance and you’re going to face enormous difficulties sooner rather than later.
Many institutions, are still managing customer data and making risk decisions based on Excel spreadsheets and Post it notes. Excel does great work but it does not provide a holistic view of the customer, nor does it manage the ongoing due diligence required under the law… let alone provide insight into the risks associated with high risk transactions. Post it notes…well the stickability of that as an option is highly debatable.
A large part of the answer lies in investing in smart technology which allows businesses to really utilise the data that they have in the most effective way to be able to manage the risks that are inherent in every single one of their customer relationships. That’s the first response.
The second response is that reporting entities need to place much, much more emphasis on investing in altering and evolving culture because it’s the human factor that is absolutely critical. Everybody within an organisation needs to buy in and be on-board with the criticality of preventing financial crime, and preventing the facilitation of crimes that generate criminal money. A big part of that lies in empowering your first line of defence by giving them access to on-boarding.
Dimension GRC has developed a cloud based solution which effectively navigates AML regulation by making compliance simple and cost effective through the use of powerful, intelligent, intuitive software.
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