Global regulators require firms to have controls in place to prevent and detect any activities linked to money laundering and the financing of terrorism. Should firms not address the core problems of a Financial Crime framework, the result could be a thematic review and hefty fines as well as a reduction in efficiency and higher costs in the long run. This in turn can affect the firm’s bottom line negatively.

Lysis Group can support firms in this regard because we have been designing and implementing effective and efficient global Financial Crime Compliance (FCC) and Client Life cycle Management (CLM) solutions for more than 20 years.

Health Checks and Maturity Assessments are the first steps in assessing a firm’s FC (FC)framework because it depicts the current state of a firm’s AML and Counter Financing of Terrorism (CFT) controls and the level of regulatory compliance.The process can identify any regulatory gaps and/or areas of concern where the firm should take remedial steps to address the gaps.  The assessment is done in line with current industry regulations and best practices against the firm’s business model and risk appetite.

When is it necessary for firms to conduct Health Checks and Maturity Assessments?

·       All firms must review their AML programmes on a periodic basis to ensure it conforms to current regulatory requirements as well as ensuring it is fit for purpose.

·       A Health Checks and Maturity Assessments must be conducted when a firm is concerned that its FC framework is not robust enough and do not reflect the current challenges of the business.

·       Similar for firms when there are major changes within a firm such as the implementation ofa new business model/products/services or a major change in senior management.

·       With ever-changing legislation relating to both domestic and international money laundering and sanction requirements, all firms should be vigilant in preventing and detecting potential money laundering and sanction evasion activities to avoid hefty fines and criminal sanctions.

Some of the specific controls that must be reviewed include:

·       How the firm assesses and applies risk ratingsto its customer.

·       If customer risk ratings are aligned with thebusiness risks. (Enterprise-Wide Risk Assessment)

·       Determine if existing policies and procedures,including ESG, are up to date and in line with industry best practices and ifthere are gaps that might put the firm at risk.

·       Determine if there are regional orjurisdictional requirements that must be considered.

·       Assess if the firm has sufficient due diligenceand enhanced due diligence procedures in place.

·       Determine if the firm’s existing AML/CFTfinancial crime framework is sufficiently robust to investigate all identifiedrisks.

·       Assess if ongoing screening procedures areeffective and efficient.

·       Assess whether the firm’s transaction monitoringprocedures, overall governance and the Three Lines of Defence model are robustand aligned with regulatory requirements.

·       Review the strength of the financial crimeculture of the firm and if the board and senior management lead by example.

·       Assess existing escalation procedures andidentify possible gaps.

·       Determine if the firm has a Money LaunderingReporting Officer (MLRO) and if this person is sufficiently skilled.

·       Assess whether the firm has sufficient AMLrecourses to accommodate all AML/CFT regulatory requirements and if theserecourses are sufficiently skilled.

·       Determine the effectiveness of communicationregarding complete, timely and accurate Management Information (MI) shared withthe board and senior management.

·       Assess if the firm’s current AML/CFT systems areefficient and effective and if record-keeping is up-to-date and performedcomprehensively.

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Who must conform to these requirements?

·       Financial Institutions

·       Non-Financial Firms

·       Insurance Firms

·       Financial Service Companies

·       Commodity Trading Firms

·       Law Firms

·       Accountancy Firms

·       Estate Agents

·       Crypto Asset Firms

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Following a Health Check and Maturity Assessment, Lysis Group can provide:

·       A comprehensive gap analysis and detailed report highlighting all the gaps regarding regulatory requirements, jurisdictional requirements and industry best practices.

·       A detailed plan that advises on the next steps that a firm should take to address the identified areas of concern.

·       Offer training workshops to ensure that all staff are aware of their AML responsibilities and have the necessary skills to carry out those roles effectively.

·       Health Checks and Maturity Assessments can be tailored to meet the specific requirements of any firm, regardless of their business activity, industry type, or size.

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