The importance of working with trained/skilled people in the fight against fincrime

Many times, at fincrime conferences, people complain of the lack of a trained staff or unskilled workforce working in the field of compliance. What has been your experience so far related to this topic? 

Putting the wheels on the AML suitcase – there are lots of wonderful, smart, enthusiastic, and talented young people in this industry. They have a very important role to play in the development of AML. Here’s the context: many years ago, when I was but a small boy, my dad would often carry two big suitcases when we went on holiday. Upon arriving at our final destination, dad would be a little fatigued, sometimes irritable and commonly sweaty. 

Why so? You ask. Well, it was because he carried the suitcases, as back then suitcases had no wheels. Imagine, if you will, the lunacy of suitcases without wheels. It references the simplicity of some wonderful solutions and innovations. Back to 2023 and the modern-day world of AML, it’s not working, it is all too often, ineffective, and inefficient. Thus, it is the role of these smart young people to put the wheels on the AML suitcase and I am looking forward to seeing it in action, one day. 

What are the causes of this lack of skilled/trained people? 

Notwithstanding the above, there are not enough trained AML professionals, moreover, some have not been trained properly and worse still, some think they do not need training. I am older and may not be wiser, but I know I can learn more and I want to learn more. Only the fool thinks he knows everything. Smart and talented AML professionals are much sort after and consequently, they are expensive. Historically there has been a threat of prison for managers, executives, and even AML professionals themselves if they fail to implement an appropriate AML programme, but no one goes to prison. This has influenced decision-making, resource allocation and expenditure. 

The fact is AML is not such a high risk for individuals and therefore it is not a priority. But change is on the horizon, new laws in the UK will commercially punish banks/firms who fail to stop money laundering. They will be presented with a 50% liability of fraud losses incurred by victims who have funds stolen from other banks/ firms and subsequently laundered through the penalised bank. Now we are talking, we are talking loud and clear, money laundering is a very high commercial risk and must be stopped. This will improve training, otherwise, money laundering will continue and losses will increase.

How can experts build the practical skills they need to keep up with all the latest industry and technological developments in the ever-evolving compliance arena? 

Don’t get ahead of yourself, start with the basics and build. The foundation of AML is KYC, so who is a bank’s/firm’s customer? Take a look in the mirror – there you go, you are a customer. What do we know, you know about you? What is hidden? You and your accounts are the benchmarks, you are not money launderers, and you now know what a money laundering account does not look like. You are not alone; most people are like you. As to others, the basics are, can you, can they prove who they are? Can they prove where they state they reside and for companies, can they prove they do what they purport to do? Now, how difficult is that? If your customer is a British Virgin Islands (BVI (Beneficiaries Virtually Invisible)) company, you and your firm are not compelled to do business with them. 

Accounts – use yours as a benchmark, be prepared to challenge, but recognise what you are seeing when looking for suspicious transactions. What if no money laundering is taking place in most instances? Focus and be prepared to miss some money launderers, this is what risk-based means. 

What can be challenging in achieving this? 

Stubborn people who think they know better and others who assert the status quo works, because they have always done it that way. Even though they have done it badly. 

Once this holy grail is achieved, what are the other beneficiaries, besides the direct ones, the people trained? 

There is no holy grail, money laundering is an incurable virus which mutates. We will be fighting the launderers forever.

To sum up, what advice would you give regulated entities to build successful compliance programs in general? 

Step back, find time to get away from putting out the fires and design better controls, a new fire engine, fire breaks, etc. Look at your programme, if there are no wheels it is ineffective and inefficient.

This editorial was initially published in the Financial Crime and Fraud Report 2023 which dives into the captivating world of fraud management, digital onboarding, and financial crime in the financial services industry. You can download your free copy here.

About Martin Woods

Martin Woods, former financial crimes detective, is the chair of the Global Compliance Institute advisory panel. He’s a Senior Compliance Officer with experience all over the world, providing training to regulators and firms. He advocates we are all here to Make A Difference and he is always on the lookout for those who may want to join his MAD – Make A Difference revolution.

About Global Compliance Institute

Global Compliance Institute (GCI) is an International Financial Crime Prevention and Compliance Training Institute based in Australia but operating globally. We specialise in Compliance and combatting Financial Crime, including Anti-Money Laundering and Counter-Terrorism Financing, in addition to KYC, Sanctions and Embargoes, Regulatory Compliance Management, FATCA, and CRS.