AML Compliance Officer: Role and Considerations

September 21, 2021

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An Anti Money Laundering (AML) Compliance Officer is someone who is appointed by a financial institution to oversee AML policies and ensure compliance with regulations.

Anti Money Laundering Compliance programs are necessary for governments worldwide to combat the increase of financial crime, however, implementing programs does not come without its challenges.

Companies now have the challenging task of ensuring compliance with many complicated laws and acts including the Bank Secrecy Act (BSA) and the Patriot Act. Failing to adhere to AML compliance programs can result in major legal consequences. AML compliance officers are often crucial to managing the implementation of a company’s AML program.

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In order to select an effective AML Compliance Officer, financial institutions should consider the following:

The Role of an AML Compliance Officer

AML Compliance officers should implement a company-wide AML policy and should focus on the internal systems implemented to try and detect as well as prevent money laundering activities, and report them to the authorities. Ideally, they'll be able to reduce AML compliance costs along the way as well.

All employees should still be aware of the company’s AML policy even if they are not the AML Compliance Officer. The AML Compliance officer must also ensure that the institution doesn’t accidentally aid Money Laundering and isn’t susceptible to criminal risk.

More specific AML policies will vary from country to country however, the more common jobs of an AML compliance officer is to:

  • Help with the creation and implementation, as well as maintenance of an institution’s AML program.
  • Ensure that the institution complies with all current financial legislation including AML regulations.
  • Create and preserve a framework for risk assessment of services, products, clients, and other matters relating to money laundering.
  • Report suspicious activity to the authorities as well as keep records of high-risk customers.
  • Arrange for outside organizations to review your institution's AML program and make recommendations in order to better comply with regulations.
  • Keep the institution’s senior management up to date on the AML compliance policies, as well as other matters relating to compliance.
  • Carry out as well as supervise AML training programs for other employees.

How to Select an AML Compliance Officer

Due to the extreme importance of an AML Compliance officer, it is crucial that Senior management chooses someone who suits the institution’s unique professional needs as well as has the ability to do their job effectively. When selecting an AML Compliance Officer it is important to take these factors into account:

Focus and Time

Ensure that your financial institution’s AML Officer is given the resources and time that they need to do their job effectively. Smaller institutions may not need to hire a full-time AML Officer, however, it is very likely that larger institutions will have to hire someone full-time in order to keep up with the greater administrative load.

Training and Expertise  

It is crucial that AML Officers have an extensive understanding of, and experience with, risk management strategies. They should have expertise that extends to methodologies of money laundering (as well as the criminal activities associated with it), and to risk analysis, not just AML systems and controls. The expertise of an AML compliance officer should also be current, so there are several industries that offer AML certification and training since AML Compliance policies are constantly evolving.

Confidence and Authority

Compliance officers need to hold sufficient authority to do their job effectively. They must interact professionally and confidently with the board of directors and senior management as well as financial authorities frequently. Additionally, they will also have to deal with sensitive financial data. It is recommended that an AML Officer is a director-level employee, and crucial that they have the confidence to do their job in a professional environment.

Your compliance officer should work closely with your fraud team, as FRAML - combined fraud and AML efforts - is the way to succeed in the near future.

Schedule a meeting with to learn more about how Unit21 facilitates the role of the AML Compliance Officer.

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