Where does your institution’s Anti-Money Laundering (“AML”) strategy place its focus? Is compliance your goal? Does your road map lead to compliance through a policy; a designated compliance officer; a system of internal controls; a training program; and independent testing? If the aforementioned are both the staples and level of meaningful thought that you have put behind your AML strategy, you may want to reassess your ultimate goal(s).
The conventional thinking surrounding AML strategy has been narrowly focused and far from cutting edge. Today’s real thought leaders in the AML space are considering more than complying with the law. The strategy that goes into an AML program should consider how the program supports the growth of the institution; how the program appropriately manages the risks of money laundering and terrorist financing; how the program formulates a foundation for absorbing (as a center of excellence) related financial crime risk management activities; how the program runs and scales with foreseen and unforeseen shifts in focus and priorities; and how the program affords regulators a sense of comfort in the institutions approach to assisting the US Government (“USG”) in combatting money laundering and terrorist financing.
The key components for developing a forward leaning AML strategy should cover the following: (1) clearly stated goals; (2) measurable strategic objectives; (3) a road map for execution; and (4) a means for tracking execution, progress, and achieved goals. These components should be formulated by the board designated BSA Officer; presented to the Board of Directors; and be supported by any/all business units needed for the shared institutional success.
The more granular details of the AML strategy should first be driven by the applicable rules (31 CFR Chapter X). Second, the strategy should begin taking shape as a result of the enterprise-wide assessment of money laundering and terrorist financing risk. Third, a capabilities evaluation tightens the reality behind the goals and objectives. Finally, the solicited thought input from key constituents (internal and/or external) formulates a tangible and executable plan.
At the forefront of the road map (the strategic plan’s guided forward progress) should be well thought out programmatic (policies, standards, models, programs, and initiatives) and operational (organizational, process, and enablers) designs.
A well-documented strategy, not only sets up your institution for compliance success, but also aligns politically charged cultures and traditionally bi-furcated efforts into a common ground for the institution’s overall success (in compliance, risk management, operational excellence, efficiency ratio, business growth, etc.).
If you find yourself without an AML strategy in place or if compliance is your goal, reassess and find ways to become a more effective program for all of your constituents.