The Evolution of Anti-Money Laundering (AML) Risk Management
In 1970, Congress passed the Currency and Foreign Transactions Reporting Act, also known as the Bank Secrecy Act (BSA), establishing requirements for record keeping and reporting by private individuals, banks, and other financial institutions. In 1986 the Money Laundering (ML) Control Act added to the BSA directing banks and other financial institutions to establish and maintain procedures reasonably designed to ensure and monitor compliance regarding reporting and record keeping. Subsequent acts strengthened sanctions and established Suspicious Activity Report (SAR) requirements, and with the USA PATRIOT Act, criminalized the financing of terrorism, strengthened customer identification procedures; prohibited financial institutions from engaging in business with foreign shell banks; required financial institutions to have due diligence procedures and improved information sharing between financial institutions and the U.S. government.
Increasing Complexity in AML Compliance
Regulators expect financial institutions undertake a holistic, firm-wide approach to AML compliance risk management to encompass sound governance through: 1) AML policies, controls, and procedures; 2) Risk Assessments; 3) Transaction Monitoring Program; 4) Findings Remediation and Exception Tracking; 5) Investigations of Fraud and Suspicious Activity; 6) Training and Awareness; and 7) Regulatory and Compliance Reporting.
The inadequacy or absence of sound AML risk management exposes banks to serious risks, especially reputational, operational, and compliance risks. Recent developments, including robust enforcement actions taken by regulators and the corresponding direct and indirect costs incurred by banks due to their lack of diligence in applying appropriate risk management policies, procedures and controls, have highlighted those risks. Much of these costs could have been avoided had the banks maintained effective risk-based AML policies and procedures.
Templar Shield AML Rule Management App-Pack to the Rescue
The Templar Shield Anti-Money Laundering (AML) Rule Management App-Pack provides institutions with the ability to simplify a key AML program element: rules and thresholds. A major pain point at many institutions, the methodology surrounding rule tuning is incredibly complex and manual. Between Rule and Threshold document versioning and the constant stream of emails, it is easy to get behind when it comes to rule and threshold management.
Utilizing three On-Demand Applications in Archer, Templar Shield has created an app-pack to streamline AML rule optimization and tuning by centralizing AML rules, thresholds, and creating an automated rule tuning process.
Additionally, the AML Rule Management App-Pack fits within a larger Templar Shield AML Compliance Program Management solution. With the integrated AML Compliance Program Management solution, organizations can have a comprehensive, up-to-date program that is easier to run, with less staff hours, providing regulatory-ready output to evidence AML preparedness. Templar Shield plans to release another app-pack in an upcoming Archer Exchange release that will address additional AML needs surrounding quality control testing, the Templar Shield AML QCT App-Pack. With this app pack, AML Programs can ensure that the controls and practices in place are of the highest quality and can meet regulatory requirements.
- Establish a central repository for AML rules, thresholds, and rule optimization
- Establish, monitor, and optimize AML rules and thresholds to identify suspicious behavior
- Integrate external transaction monitoring systems for comprehensive compliance risk management
- Reduced manual processes and ease of workflow and reporting
- Ability to report accurately and easily to regulators about AML activities and AML risk
- Automated rule optimization processes
- Eased tracking through reporting and dashboarding, enabling better insight into rules, thresholds, and their optimization
Ready to learn more about the Templar Shield AML Rule Management App-Pack?
Register to join us for a Free Friday Tech Huddle on April 9, 2021 where Templar Shield will provide a detailed overview and demo of the app-pack. Free Friday Tech Huddles are only available to Archer customers. If you are not yet a customer but you are interested in learning more, please contact your local representative or authorized reseller — or visit us at rsa.com.
About the author(s):
GRC Manager, Templar Shield
James is an experienced Enterprise Governance, Risk, and Compliance (eGRC) Manager within Templar Shield’s eGRC Consulting Practice. He has implemented numerous GRC Technology solutions including Policy Program, Incident, Compliance, Business Continuity, Audit, Issues, Risk and Control Self-Assessments, Vendor/Third Party Risk, Vulnerability Management and custom solutions for Anti-Money Laundering. He’s also advised clients in the creation of strategy roadmaps and process improvement. James has been a leader of numerous technical implementations of all sizes, with a history of delivering complex projects.
Product Manager, Archer Exchange
Gloria Higley is a Product Manager focused on providing useful and relevant product offerings for customers and partners with the Archer Exchange. Offered online through RSA Link, the Archer Exchange provides access to pre-built App-Packs, RSA Ready-certified Integrations, Tools & Utilities, and Content that complement and enhance out-of-the-box capabilities of Archer use cases.
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