KPI’s are useful in identifying underperforming areas and those which could benefit from more resources.

As a result of the financial crisis of 2007-2008, which had a significant effect on the global economy, coupled with significant AML/CTF failures, the supervisory agencies, all over the globe, began to reconsider their supervisory strategies. As a result, financial institutions are required to manage risk more effectively and openly.

The letter clarifies Federal Reserve views applicable to large banking organizations with complex compliance profile in these areas: Organizations that should implement a firmwide approach to compliance risk management and oversight; Independence of compliance staff; Compliance monitoring and testing; Responsibilities of boards of directors and senior management regarding compliance risk management and oversight.

Stating that in the design of a risk framework, it is important to assign organizational roles, authorities, responsibilities, and accountabilities.

“Advisory to U.S. Financial Institutions on Promoting a Culture of Compliance” (“The FinCen Advisory”) states that a financial institution can strengthen its BSA/AML compliance culture by ensuring that the leadership actively supports and understands compliance efforts, efforts to manage and mitigate BSA/AML/CTF deficiencies and risks are not compromised by revenue interests, relevant information from the various departments within the organization is shared with compliance staff to further BSA/AML efforts, the institution provides adequate personnel and technological resources for its compliance function, the compliance program is effective by ensuring that it is tested by an independent and competent party, the leadership and staff understand the purpose of its BSA/AML efforts and how its reporting is used.

All communications used on email newsletters, flash reports, and significant cases are all subject for approval.

Ask governance framework should cover all the risks relevant to the financial institution including those related to credit, interest, price, operational, liquidity, strategic, reputational and compliance.

Policy and Procedures must include: Customer acceptance criteria including the method for defining the AML/CTF risk represented by the customer and whether that is within the risk tolerance of the financial institution; Definitions of the key risk factors that need to be documented when deciding on the AML/CTF risk of a customer; Definitions of high, medium and low risk customers and products; The approval procedures for accepting high risk customers.

“An ongoing employee training program,” is one of the four pillars and a mandatory requirement in Section 352 of the USA PATRIOT Act.

Every job function in the financial institution must have up-to-date knowledge for it to be performed satisfactorily. It includes knowledge of banking in general and the specific financial products provided by the front line unit and the processes that are the responsibility of the back office.

A training needs assessment is also called as a training needs analysis.

Without the training needs assessment, it would make it difficult for a financial institution to determine which knowledge and skills require support from the training program and the priority associated with each.

Product training analysis is a review of the courses used to train staff in various financial products.

The most common in financial institutions are, product training analysis, job function analysis and personal analysis.

It determines the costs and benefits of implementing training or performance guidance.

The Product training analysis encompasses the courses used to train staff on various products that are produced by their respective financial institution. Being aware of which products are most susceptible to being used for the financial crime can help professionals identify suspicious activity at the moment.

The following job specific knowledge requirements needed are credit analysis, loan operations and foreign exchange operations.

The aspect that needs to be decided and recorded is an AML/CTF personnel risk ranking (this includes Sanctions) for every job title or function. It is designed to define the AML/CTF and sanctions the knowledge and training required to be competent in that job function.

Creating a training plan, is equally as important in determining the financial institution’s training program, as obtaining the training assessment results.

The components of an enterprise training and communication plan include formal training, informal training, and communications.

Informal training is comprised of lunch and learn sessions, webinars and team meetings.

Formal trainings include in-house developed and presented, purchased and presented in-house and purchased and attended outside.

A course catalog is a great way to assist in the onboarding of new & existing hires, contractors, or other stakeholders who may need additional training.

A training faculty is where candidates are assessed on their financial crimes and risk management knowledge, and their personnel and presentation skills.

Due to advances in technology, potential training delivery channels will continue to grow and two of the most popular channels are classroom and online.

Classroom as a delivery channel offers opportunities for networking and informal assessments of the participants and their eligibility for advancement. The audience can be increased by using video conferencing.

Risk governance framework should cover all the risks relevant to the financial institution including those related to credit, interest, price, operational, liquidity, strategic, reputational and compliance. It should also include the following risk appetite statement, strategic plan, culture of risk, communication about risk, oversight by the board of directors, policies and procedures related to risk, risk metrics and thresholds, risk data management, talent and performance management and last but not the least, succession planning.

A good governance structure assists in ensuring compliance with law and regulations.

One of the responsibilities of a CEO is to develop the risk appetite statement.

MLROs have a duty to deal with any information, knowledge or suspicion of money laundering and properly disclose such matters to law enforcement, in this case, the National Crime Agency.