Recently, it seems that just about everyone an eye on complying with Anti-Money Laundering laws and requirements. With recent cases involving both small and large firms, the Securities and Exchange Commission (SEC) and Department of Justice are doling out hefty fines for non-compliance, regardless of the size of the institution.
While laws such as the Intelligence Reform & Terrorism Prevention Act of 2004 have been enacted just within the last decade, AML compliance is nothing new. In fact, banks have had anti-money laundering programs in place going all the way back to the Bank Secrecy Act (1970). So why are banks getting slapped with AML fines today?
Evolution! In the world of risk and compliance, nothing is a constant. You’re always encountering new risks, compliance regulations are consistently changing and AML is no longer just about drug and terrorist financing. Unfortunately, many of the AML programs that were implemented a decade ago didn’t factor in risks like cyber-attacks, digital currencies and online Ponzi schemes.
According to a PWC study, banks are not keeping up with monitoring and optimizing their surveillance and are sliding into an “AML Drift.” In a recent American Banker article, John Sabatini of PWC explains that, “Many firms implemented AML surveillance technology systems several years ago, and they were set up as a point-in-time solution. However, the enormity of change occurring within these firms … makes the initial implementation of these systems obsolete, leading firms and regulators to call for their replacement.”
In the past six months, one of the largest growth areas for Rsam has been replacement of legacy technologies and point solutions, and we can see why! Point solutions just aren’t flexible enough to accommodate for changes in process and requirements down the line. When we engage on AML projects we often start with an urgent request from the customer to automate and ‘clean up’ the legacy processes, but there is a tremendous opportunity to improve processes as well. It’s an exciting time to use new and powerful tools to address AML concerns.