Anti-Money Laundering: Avoid Unconsidered Perils

“It’s not as if our enforcement actions are over. There’s more to come, and that suggests to me that there are still banks that haven’t gotten the message.”

—Mythili Raman, former acting assistant attorney general for the Criminal Division, U.S. Dept. of Justice

New enforcement actions and fines for poor compliance with the Bank Secrecy Act (BSA) are hitting the news at a steady pace.

Of course, some of these actions are related to fraudulent behavior and active money laundering programs, but did you know the Bank Secrecy Act allows regulators to take enforcement action simply when they consider a bank to have inadequate controls?

Think about that one…certain regulations leave banks open to prosecution, fines, and other enforcement actions simply for having inadequate controls in place that expose the potential for money laundering.

Banks are eroding customer trust, absorbing massive fines, and facing criminal prosecution simply for having vulnerabilities to money laundering activity.

As you’d expect, Financial Services firms are racing to improve controls.

As you may not expect, most hit major obstacles:

  • Silos of data and process
  • Information stored across many systems
  • An inability to access, analyze, and report on complete information

Why? Complexity often fills the natural gaps gaps between institutions and their IT systems. We’re talking about lots of manual processes…spreadsheets…and email—hardly anything that can be considered effective, let alone a long-term solution. And, unfortunately, these workarounds—though all usually meant as a temporary fix—have a bad habit of becoming permanent. In any case of compliance, that’s not a good thing.

Anyway, here’s a recent whitepaper with more detail around understanding and avoiding the unconsidered perils of Anti-Money Laundering programs. If you download and read it, I hope you’ll share your thoughts.

Zach Messler