With a new year well on its way it is important for every Financial Institution (FI) to conduct an anti-money laundering (AML) Health Check and Maturity Assessment to review if their AML policies, procedures, and systems are fit for purpose.

Why are AML Health Checks necessary?

AML Health Checks and Maturity assessments are there to uncover issues related to regulatory and policy gaps in a Financial Institution (FI) Compliance framework. The AML Health Checks and Maturity Assessments are used to review a FI’s current AML policies and procedures including Governance Structures, ESG Policies, Risk Assessment and Due Diligence processes, Transaction Monitoring and Training provisions.

Any gaps identified in the Health Check report, and during a Maturity Assessment will serve as ‘areas of concern’ which require full management attention to apply remedial actions to avoid regulatory fines.

The AML Health Checks will help map regulatory requirements to policy/procedures and test the controls set by the firm to address any money laundering risks. During a Health Check, key observations/recommendations will be documented in reports and data analytics are used to identify key risk indicators, based on compliance data, and how to effectively monitor them.

What are the consequences for non-compliance of AML laws and regulations?

Consequences for non-compliance with AML laws and regulations can have serious consequences including punitive fines, criminal proceedings, damaged reputations, and sanctions.

A recent instance where the regulators have imposed a fine for non-compliance of AML laws:

2022

Santander UK – Fine: 108 million GBP

The Financial Conduct Authority (FCA) posted a fine of £108 million on Santander UK for failings in overseeing and managing its AML systems during the period of 31st December 2012 to 18 October 2017.

The bank failed to verify the information provided by customers about the business they would be doing. The firm also failed to properly monitor the money customers had told them would be going through their accounts compared with what was being deposited.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:

“Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime. As part of our commitment to prevent and reduce financial crime, we continue to take action against firms which fail to operate proper anti-money laundering controls”.

Final Thought

Regulators continue to uncover issues related to poor AML controls. The AML Health Checks and Maturity Assessments conducted by independent professional organisations are vital to identify existing and potential weaknesses and to adequately address these weaknesses in a timely manner.

How Lysis can help

Lysis Group specialises in conducting detailed Maturity Assessments by reviewing all current compliance policies and procedures in line with the industry regulations and best practices against the firm’s business model and risk appetite. Lysis will also conduct meetings with the senior board of the firm to understand the risk culture that exists in the firm.

The Lysis AML Maturity Assessment can be tailored to meet the specific requirements of any firm, regardless of business activity and industry. Lysis will provide further remedial plans for issues which are identified in the Maturity Assessment report.

Following an AML Health Check and/or a Maturity Assessment, Lysis can then assist with:

• A transformation programme to enhance the AML framework, policy, procedures and systems of a firm;
• Remediate customer files and transaction monitoring records; and
• Host training workshops to ensure that all staff are aware of their responsibilities regarding AML and have the necessary skills to carry out those roles.

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