In AML Surveillance

The horrific events that happened last week in Orlando, Florida, could also provide us with certain lessons that can be applied to the AML compliance efforts: The mass shooting at a gay nightclub in Orlando was the third time in recent years that someone who had been under FBI scrutiny carried out a terrorist attack, raising questions about whether the law enforcement agency is equipped to identify or even stop escalating threats in the digital age. The “embarrassment” for the FBI could be also a lesson for financial institutions.

Blacklists and similar name checking – Even if an individual or entity name is not on a sanctioned or similar blacklist, you will be expected to do a thorough due diligence effort on reviewing the activity, or even decline the opening of an account or transaction, if you consider that other risk factors are present. Conditions that require further due diligence include geographic location, type of service requested, source of funds and use of funds.

Devote the appropriate resources to timely and effectively review all suspicious activity referrals and alerts you receive – The tight-knit law enforcement community has not found fault with the bureau, saying FBI agents are swamped with terrorism cases, bound by constitutional and privacy restrictions, and facing dangerous new threats from the Islamic State. The same will not be said of you if your cases are piled up and there’s a backlog of reviews to be done or if you have an obsolete or outdated system. Examiners will be looking very closely at your AML review process, from identification, reporting, disposition and available tools.

Sometimes the little details are the ones that make all the difference – Like law enforcement, financial institutions are face new and different threats every day, and the challenge is similar to finding a needle in the haystack. But if the needle is then traced back to your institution, you will have a tough time explaining why the needle was waived and not reviewed further.

Even if the person/entity has been a long time customer it doesn’t mean it carries no risk – According to recent news articles, the shooter was known to employees and other clients as he had previously visited the club. In the AML field, you need to ensure that the information on (old and new) customers is current and reviewed on a frequent basis. Frontline personnel need to be vigilant to changes in customers’ activities and report any suspicions through the appropriate channels. These deviations need to be reviewed and properly analyzed.

Mr. Dominic Suszek is an experienced and successful executive with broad experience in bank operations, audit, information technology, and regulatory compliance. As a senior executive involved in all aspects of regulatory compliance, with more than 25 years of banking expertise in operations, technology, security, fraud and compliance, he has acquired extensive knowledge of the requirements from many regulatory agencies in the US, the Caribbean, along with Central and South America.
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