As I discussed in my previous post, the focus for anti-money laundering (AML) initiatives has shifted to reducing jurisdictional variance and establishing enterprise-wide clarity and consistency.  Developing an enterprise-wide standard is an important first step in improving consistency in AML infrastructure, services and decision-making.

The enterprise-wide standard should be applicable across jurisdictions, with specific variations for lines of business and/or regions.  While the agreed enterprise standard should be stringent enough to meet all jurisdictional requirements, it can be less restrictive than specific local jurisdictional requirements, which can be addressed on an exception basis.

Enterprise-wide control frameworks help deliver consistent, pragmatic solutions across lines of business and/or regions.  They help establish standardized processes and infrastructure and leverage economies of scale in areas including processing, intelligent workflow routing, and shared services.  As seen below, however, banks, insurers and capital markets firms may find it necessary to implement additional standards to areas not covered within the baseline.

Enterprise-wide:

  • Mandatory agreed upon common standards, applicable across lines of business and across jurisdictions throughout the firm.
  • Centrally stored and accessible by all lines of business, regional and local teams and management.
  • Singularly owned by the global financial crimes compliance function and the firm-wide AML compliance officer.

Line of Business:

  • Mandatory standard that is specific to a line of business, subsidiary, service, customer type or product.
  • Maintained centrally, and accessible throughout the firm with additional requirements and/or variations from the global standard identified and tracked.
  • Devised in concert with global financial crimes compliance, but owned by the line of business compliance officer.

Regional:

  • In region, AML operating standards used.
  • Devised in region, but shared with global financial crime compliance to help identify and track variance and/or additional requirements.

Local:

  • Local AML standards specific to a particular jurisdiction.
  • Provide for the explicit local statutes that are not captured through the enterprise, lines of business or regional standards.
  • Devised in country, but shared with global financial crime compliance to identify and track variance and/or additional requirements.
  • Locally owned by country compliance officer.

In my next blog, I will look at the journey toward an enterprise-wide standard for AML compliance and how regional standards can be identified and leveraged to form the basis for such a standard.

For more information, view our presentation on the need for a global consistent standard for anti-money laundering compliance.

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