An organization's AML compliance efforts are only as good as the teams behind them. An organization with a strong culture of AML compliance can identify compliance inconsistencies early, minimize risks, and provide effective compliance solutions. Assembling a top-notch compliance team is essential to establishing an effective compliance program within an organization.
When there is a clear understanding of risk responsibilities across the entire organization, businesses are far more successful at implementing AML measures. In this section, we explore how to build a top-notch AML team to help you effectively combat money laundering, including:
Let’s begin with the five main steps to build an AML compliance team.
An ethics-based approach that values culture is replacing the ‘tick box’ mindset that once defined compliance. The compliance team does not operate in a silo, and they need to be integrated with the needs and responsibilities of the organization as a whole, understanding what the product development, sales, and marketing teams' goals are. Most importantly, they need to clearly understand how compliance affects other business departments, and work closely with those teams from the start.
To achieve this, compliance teams need to be aware of the difficulties the organization faces so they can make compliance meaningful across the organization’s various functions by customizing standards, communication, and policies.
Below, we look at the main steps for building out a highly integrated, effective AML compliance team.
1. Designate a BSA Compliance Officer
The Bank Secrecy Act Compliance Officer (BSA CO) serves as the link between senior management and the compliance team, ensuring the executive's vision is carried out. They are primarily responsible for overseeing their institutions’ anti-money laundering compliance programs, policies, and operations.
Financial institutions must legally appoint a BSA CO under compliance regulations in almost every jurisdiction. Failing to have a BSA CO can lead to fines, compliance inconsistencies, and loss of goodwill. Typically, BSA COs have prior experience with AML compliance at financial institutions and bring with them experience and expertise that enables them to make high-level decisions about regulatory compliance within the organization.
2. Hire Compliance Officers for Investigation + Filing
The Chief Compliance Officer can’t do it alone; they need a team of compliance officers responsible for analyzing, investigating, and reporting suspicious activity. They must be well-versed in KYC procedures, customer due diligence, transaction monitoring, and regulatory reporting.
Compliance officers report directly to the CCO. Without experienced and properly trained COs, companies risk breaking applicable laws and regulations. It’s essential that COs can monitor and drive compliance management, file suspicious activity reports, investigate anomalies, and ensure guidelines outlined by the CCO and senior management are followed. Hiring a team with experienced and diverse members is beneficial for the organization as they add value to the company with the help of their individual skills or strengths.
3. Build Out Your Compliance Engineering Team
Even the best compliance team will fall short without an engineering team that can build and implement AML monitoring rules and systems. Building a compliance engineering team is essential in automating and streamlining compliance processes. It empowers compliance offers, analysts, and the CCO to work efficiently and create compliance procedures much faster.
Their responsibilities include improving controls for internal security, performing regular security-related checks, reporting on the effectiveness of controls, and responding to ad-hoc external queries related to security. Compliance engineers must understand the technical implementation details necessary to assess general and situational risks. They should clearly understand cloud infrastructure and ISO standards that keep the organization safe and secure according to IT security guidelines.
4. Align Your Team Around Your Compliance Program
Team members should respect, trust, and encourage each other. This entails considering how each colleague's skills and expertise will mix well. When issues arise, a wide range of different perspectives and ideas will be advantageous, as these insights can determine the best path forward.
The team should be able to work well together while also being able to challenge each other when required, advocating for updates according to their duties and responsibilities. To establish accountability for the program and each individual, everyone must know what is required of them. Expectations that are clearly communicated lead to a sense of camaraderie and trust, resulting in better performance.
5. Train Your Team and Get Started!
By providing staff with compliance training, the company can ensure they are aware of all the internal and external regulations and laws that affect business operations. Additionally, it guarantees that the employees are aware of how and why they must follow guidelines in their tasks.
Compliance training needs to be essential and continuous. Compliance training must be given to everyone in the organization regularly, not only to new hires. If implemented right, this creates the foundation for a positive culture where team members can voice concerns and prevent issues from developing. Every organization and industry will have a different set of compliance training subjects, and training will vary from position to position and across departments.
However, there are several essential topics that organizations should tackle in their training process:
- Federal and state laws
- Company procedures and policies
- Code of conduct
- Data privacy and security
- Fraud detection and prevention (anti-money laundering, anti-bribery, etc.)
- Business ethics (gift policy, conflicts of interest)
- Risk management
Compliance officers are in charge of ensuring that their company's organizational and management procedures comply with regulatory obligations. Their broad responsibilities include everything from conducting risk assessments to providing guidance.
Let’s examine the responsibilities a compliance officer will need to fulfill.
- Compliance Policy: Developing and implementing the company's AML compliance policies by keeping up with the latest updates on regulations.
- Training: Providing training to the staff on a regular basis, and keeping them informed about any legal or regulatory changes.
- Risk Assessment: Conducting risk assessments, as well as creating a mitigation plan to minimize and manage these risks.
- Due diligence: Establish a robust KYC and due diligence procedure to onboard clients and continuously monitor them based on the outcome.
- Point of contact: Act as a point of contact between the senior management, compliance team, and regulators.
- Reporting: Identify and report any suspicious transactions or activities as per regulatory guidelines.
If you’re operating in the U.S., many compliance teams choose to have a Bank Secrecy Act (BSA) Officer to ensure that the institution is fully compliant with any laws related to the Bank Secrecy Act. The role of a BSA differs slightly from an AML Officer. If you’re in the U.S. check out our deep dive on the role of a BSA Officer.
Compliance officers' salaries are based on their level of professional experience; the more experience, the higher the compensation. High standards of ethics, exceptional communications skills, and managerial skills are essential for the position. Because of this, businesses rarely use Compliance Officers in entry-level positions.
There are three types of seniority levels, each of which has a range of compensation packages:
- The annual salary range for a Compliance Officer is $55,000 to $100,000.
- The annual salary range for a Senior Compliance Officer is $90,000 to $130,000.
- The annual salary range for a Chief Compliance Officer is $120,000 to $250,000.
Investing in compliance resources can be expensive; the best way to save such expenses is by investing in reliable AML software and training a compliance professional to use them. As per BSA and other legislations worldwide, there is a mandatory requirement to hire a compliance officer or MLRO.
Investing in AML software solutions can help the compliance officer and the entire business financially by avoiding fines, and penalties, and paying salaries to multiple people to do the same job manually. A high-quality AML compliance tool allows even non-technical staff to perform complex tasks. This lets you build out a team with fewer resources that can perform at the level you need. This not only helps with the turnaround time, but also helps the compliance officer work independently and efficiently, with accurate results.
AML compliance officers help ensure their companies follow AML regulations and take the appropriate measures against financial crimes. It’s crucial to invest in a high-quality solution that empowers compliance professionals to identify instances of fraud and money laundering rapidly and without help from the engineering team.
The Compliance Officer is one of the 5 key pillars of a proper compliance program, but there are many other elements they will be responsible for overseeing and ensuring are functioning properly, including the development of internal controls, establishing a BSA training program, utilizing independent audits and reviews, and performing Customer Due Diligence (CDD).
All of these pillars as well as the steps to creating a successful program are covered in the next section of our guide: how to create a successful AML compliance program.
If you first need to learn more about integrating tools and software into that program, jump back to our chapter: 8 Types of AML Software & Solutions + Top Features to Look For.