Governments must take more active role in AML efforts: ACAMS survey

Financial institutions welcome plans to regulate firms for anti-money laundering (AML) efficacy but say more input is needed from governmental officials.

This will support the effectiveness of their compliance efforts, according to a new global survey of financial crime experts commissioned by ACAMS. The ACAMS Compliance Effectiveness and Risks Survey found that four out of five of the more than 340 respondents believed that the periodic issuance of AML priorities by a national governmental body would be helpful in shaping an institution’s compliance program.

Participants in the survey said they would like to see more guidance from regulatory and law enforcement officials, including on their suspicious activity reporting and risk assessments, and on the September 2020 Advance Notice of Proposed Rulemaking by the Financial Crimes Enforcement Network (FinCEN) to regulate firms for an ‘effective and reasonably designed AML program’.

When asked what they would most like to see changed about their countries’ suspicious transaction reporting regime, 39% of the respondents said timelier feedback from the law enforcement community, including on whether additional compliance steps were merited.

Approximately 27% of the respondents said that improved transparency of corporate beneficial owners would best help compliance professionals fight financial crime. These were followed closely by others who said greater authority to share compliance data with peer institutions would be most useful change for compliance professionals.

While 88% of the respondents cited the adoption of new technological tools as a top priority for meeting regulatory expectations going forward, the same percentage of participants viewed the criminal exploitation of technology as a top factor when it comes to failures to identify suspicious transactions.

The publication of the FinCEN Files reports in 2020 were viewed by 43% of respondents as having a net-positive impact on global efforts to fight financial crime, though 27% believed the news stories had negatively affected the compliance industry. Nearly a third of the respondents said the reports, which were based in part on leaked Suspicious Activity Reports (SARs), would lead to increased regulatory scrutiny of financial institutions.

More than half of the survey participants said that monetary penalties were effective as a deterrent to compliance violations only in limited instances.

Approximately 71% of the survey’s responses were from individuals working for financial institutions, of which 35% worked for an international bank. Of the 8% of respondents working in governmental roles, 58% were financial regulators. Other survey participants worked in the fintech, regtech, cryptocurrency and legal sectors, while approximately half of the respondents were from the United States or worked in US-based institutions.