Facing the Challenges of Anti-Money Laundering Regulations

To stay in compliance with rapidly expanding international, federal, and local AML regulations and avoid what can be career- and business-ending consequences, companies face the seemingly Herculean task of investigating every suspicious financial transaction, which can number in the tens of thousands every single month.

Some of these challenges will be addressed at the Association for Certified Anti-Money Laundering Specialists (ACAMS) Conference in Las Vegas later this month.  In his presentation, “Achieving Compliance Efficiencies Amid Heightened Regulatory Scrutiny,” Lee Phillips, Product Manager for Attivio’s Anti-Money Laundering Investigator, will explain how technology can change the investigative process, substantially transforming productivity and ensuring more accurate case resolution.

The Evolution of AML Regulations

When Congress passed the Bank Secrecy Act in 1970, it was the first of its kind, AML legislation to prevent and detect the escalation of this type of financial crime. It’s doubtful that these lawmakers imagined the magnitude and scope of today’s global money laundering activities; the complexity of the technologies currently used to house and analyze financial data; or the enormous penalties levied against companies and individuals that fail to comply with the rapidly changing regulations.

Global Growth of Money Laundering

According to the United Nation’s Office on Drugs and Crime, the estimated amount of money laundered globally in one year is 2-5% of global GDP, or $800 billion-$2 trillion in US dollars. Around the world, government and law enforcement agencies are tightening regulations to clamp down on criminals’ attempts to legitimize “dirty” money gained through drugs, human trafficking, terrorism, and other nefarious criminal activity. Europol and Interpol have recently announced that they are joining forces to tackle money laundering through Bitcoin and other virtual currencies that are perfectly designed for tech-savvy criminals.

In the US, the news is filled with stories of major financial firms facing serious consequences for failing to heed federal and state AML regulations. One of the most recent and visible stories discussed in a previous blog post, The Raymond James Case, demonstrates the critical importance of acting on regulators’ recommendations and how compliance officers can’t hide behind the corporate veil to escape personal accountability.

The New York Department of Financial Services (NYDFS) recently went so far as to enact a hard-hitting new rule (Part 504 of Title 3 to the New York Codes, Rules and Regulations, Banking Division Transaction Monitoring and Filtering Program Requirements and Certifications) that requires all eligible entities to establish and maintain a transaction monitoring and filtering program with particularized attributes aimed at curing potential shortcomings in existing AML programs. The rule “exposes boards of directors and senior officers at New York financial institutions to a heightened risk of personal liability unlike any other existing financial regulatory scheme” (Lexology.com).

Anti-money laundering compliance isn’t just a financial institution problem. Casinos have recently become a target for regulators as reported in a recent story about a California card club order to pay $2.4 million for violating the Bank Secrecy Act. According to the US Department of the Treasury’s Financial Crimes Enforcement Network, reports of suspicious activity associated with commercial real estate is also on the rise, as it is with many businesses that regularly engage in cash transactions. 

Using Technology to Meet the Challenges of Compliance

Attivio’s Anti-Money Laundering Investigator helps you minimize the total cost of compliance and improve efficiency and accuracy by:

• Identifying, correlating, and gathering case evidence from every relevant internal and external source (e.g., feeds, applications, and repositories) into a single, consistent view of transaction or entity
• Calculating case similarity, complexity, and completeness scores for all cases, facilitating faster and better focused case assignment
• Automatically generating formatted case summaries and narratives from gathered case evidence, highlighting missing information and next steps
• Processing every case summary, including added evidence and case disposition, into an audit-ready, discoverable format

How confident are you in your organization’s ability to efficiently and accurately comply with government regulations to detect and prevent money laundering? Are you prepared to face criminal prosecution and pay millions of dollars in fines for failing to comply with international, federal and state anti-money laundering regulations? Do you think you have to sacrifice accuracy for improved efficiency with investigating and processing suspicious cases?