Jersey: How Regulated Firms Can Successfully Navigate The AML Landscape

If you have spent any time working in the regulated sector, then you will know that the demands placed on firms regarding their anti-money laundering (AML) and financial crime procedures are increasing year-on-year. So, what is driving the increase in AML and financial crime supervision and what are the potential solutions for firms trying to navigate all the requirements? Newgate Compliance's Joe French, Head of Financial Crime, and Shazad Khan, Consultant explain.

We only need to look at the enormous £320m fine and criminal charge NatWest recently received for money laundering failings to see the zero tolerance direction regulators are moving in.

So, what is driving the increase in AML and financial crime supervision? There are several key factors to consider:

• prominent data leaks such as the Panama, Paradise, and most recently Pandora Papers;
• high profile AML cases against large institutions;
• evolving domestic and international regulatory requirements;
• increasing global political pressures; and
• organisations such as the Financial Action Task Force (FATF) and Transparency International, promoting and driving effective legal, regulatory, and operational change.

Taken together, these factors are making AML and financial crime compliance a common cause for concern for firms. And it's not difficult to see why - an Ocorian survey carried out earlier in 2021 revealed that out of 100 senior-level capital markets professionals, only 61% felt very or moderately confident in their firm's AML capabilities. That figure fell to 60% for European respondents, and further still to 48% for US respondents.

Put alongside the extraordinary figures released by leading legal and business research provider LexisNexis, which estimates AML compliance is costing UK financial institutions £28.7bn annually, there is clearly scope for improvement in this space.

OUTSOURCING YOUR AML FUNCTION CAN PROVIDE A SOLUTION

Getting tangled up in complex and technical AML requirements can often be an inefficient use of time for a growing business and result in significant costs.As a result, at Newgate Compliance we are working closely with firms to provide an outsourced solution to AML compliance, enabling firms to focus on what they do best - adding value to their business.

Our AML team can act as a seamless extension of your business, handling all day-to-day tasks such as customer onboarding and periodic reviews; customer due diligence and know your customer requirements; PEPs and sanctions screening; transaction monitoring; AML reporting; regulatory filings; compliance framework monitoring; and general financial crime advice.

GET CLEAR AND PRACTICAL ADVICE

For other clients it is simply about receiving clear advice and guidance when they really need it. We are highly experienced in helping firms to meet their financial crime and wider regulatory requirements, so whether it is installing a new financial crime compliance framework or re-building and improving upon an existing one, we can assist firms in meeting all their growing obligations.

REMAIN COMPLIANT WITH AN INDEPENDENT AUDIT

We also perform independent audits of firms' existing systems, controls, AML KYC files, outsourced providers such as appointed administrators, and compliance programmes by way of a compliance health check. For some this requirement is driven by local regulatory requirements as is the case with Bermudan, Caymanian, and Mauritian clients, whilst for others it is reassuring to have their procedures regularly reviewed by an independent firm.