Wash, Rinse, Defeat: Intelligo’s Guide to Anti-Money Laundering

Are your U.S. Anti-Money Laundering or AML policies, procedures, and controls up to standard? These laws, regulations, and standards serve a critical role in protecting both your financial institution as well as the integrity and stability of the global market. If you think AML is a waste of your business’ valuable time and budget or just another way “big brother” aims to seek control, think again. Today, we’re unpacking the broad spectrum significance of these standards, and how to ensure your company is compliant.

AML is a set of regulations under the Bank Secrecy Act designed to prevent money laundering and other financial crimes. By identifying and reporting suspicious activity like market manipulation, securities fraud, and terrorist financing, AML programs serve as a gatekeeper, protecting your business from criminally obtained money and saving you from potential fines, litigation, possible criminal liability, and tarnished reputation. Every financial institution is required to implement an AML program including written policies and procedures, supervisory controls, a compliance officer, ongoing employee training, and independent reviews to monitor the program's effectiveness. 

According to the Financial Industry Regulatory Authority (FINRA), the organization responsible for reviewing a company's AML program, these basic tenets are required:

• The program has to be approved in writing by a senior manager.

• It must be reasonably designed to ensure the firm detects and reports suspicious activity.

• It must be reasonably designed to achieve compliance with the AML Rules, including, among others, having a risk-based customer identification program (CIP) that enables the firm to form a reasonable belief that it knows the true identity of its customers.

• It must be independently tested to ensure proper implementation of the program.

• Each FINRA member firm must submit contact information for its AML Compliance Officer through the FINRA Contact System (FCS).

• Ongoing training must be provided to appropriate personnel.

• The program must include appropriate risk-based procedures for conducting ongoing customer due diligence, including (i) understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile; and, (ii) conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information, including information regarding the beneficial owners of legal entity customers.

Even with an AML program in place, it’s crucial you take its findings seriously and carefully get to the root of any red flags that pop up. Companies of all sizes must stay hypervigilant about AML policies by allotting ample funding and attention to their compliance departments and refusing to turn a blind eye to anything suspicious that’s detected. Failing to do so could result in a system that becomes an easy target for criminals and money launderers to execute illegal activity, allowing unlawful transactions to take place due to the oversight or lack of scrutiny.

By sidestepping significant compliance protocols, ignoring gaps in your compliance process, or favoring profits over law abiding practices by depriving your compliance department of necessary funding, you could fall prey to criminals engaging in illegal banking through your system, ultimately becoming a criminal yourself. 

Don’t wait to reinforce your compliance and due diligence practices until it’s too late. Intelligo provides AML screening coverage as part of our larger suite of services, schedule your demo today to ensure your processes, partners, and employees are adhering to legal standards set forth to protect you from unlawful schemes. With Intelligo’s AML coverage you can get back to business as usual with the peace of mind that your operations are compliant, legal, and protected.