On Compliance: Anti-money laundering vigilance
Community of Development Cooperatives Credit of North Federal Dade Fraud with Federal Regulatory Authorities and the Possible Death of Violations Against Money Laundering Offers an Enlightening Narrative on the Need for Compliance with Continued Supervision of the Right of Secrecy Banking and the law of the Patriot. In the investigation complaint and the resulting fine of $ 300,000, the Financial Crimes Enforcement Network accused the syndicate of $ 3 million credit exposed the US financial system to significant risks of money laundering and terrorist financing country High risk in the Middle East and Central America.
North Dade Community Development FCU was wound up in 2015 by the National Administration of Credit Unions due to violations. The crate had been hired to serve 56 in MSB areas at high risk. He has handled nearly $ 2 billion in financial transactions for money service businesses and the process fails to meet obligations against money laundering and terrorism in order to verify clients, filing reports, risk assessments Conduct, report suspicious transactions and maintain robust controls mitigate risks. Risks.
This case serves as a warning to credit unions that must rigorously monitor customers and related businesses can not use third parties to exercise due diligence and comply with the AML.
A standard compliance program that fits all financial institutions does not simply exist, so each organization must develop a framework that meets their needs and culture. A first step for a caisse to build an AML compliance program is to conduct an overall risk assessment taking into account all products, services, customers, entities, transactions and geographic locations with internal controls put in place Mitigate the risks. Next, you should test and evaluate the effectiveness of their AML policies and procedures. Once you identify and strengthen weaknesses, credit unions can develop a unique and comprehensive view of members and risks.
The second key step is to consistently apply the principles of "knowing your client". An effective KYC program is one of the keys to preventing violations of regulations against money laundering strategies. This includes a client identification program below, which is designed to allow the background to form a reasonable belief that it knows the true identity of each member. The assessment of front-line member risks, as well as processes and procedures to understand the financial transactions of members, are designed to lead without knowing the wrong actors and become a conduit for money laundering.
It is essential to build an internal team to identify indications of money laundering activity. Financial institutions are required to designate an AML compliance officer and ensure that appropriate procedures are in place to allow employees to report suspicious activity. Accurate information means that unions and credit must document and follow procedures for transactions escalations clearly high risk, so that any employee of a credit union that you have a question or suspicion of a transaction knows how Assemble the string management. Contact (phone, e-mail, face to face or using the specific software application / system) and when to communicate (within what time frame).
Finally, credit unions should invest in the training of personnel responsible for managing funds and open accounts to ensure that these employees recognize the red flags of money laundering.
According to the Wall Street Journal, banks and smaller US credit unions are targeted by criminals trying to avoid the most sophisticated and rigorous controls used by large banks. Any attempt to detect new threats with outdated tools or security measures are not exhaustive leaves open to forms of crime and the evolution of financial institution findings by default.
Traditional AML technology solutions used by many institutions focus on customers, transactions and accounts to detect suspicious transactions. These systems adopt a standards-based approach based on a pre-defined set of fixed rules to identify known patterns of criminal behavior, such as "Tell me where the ID is used for a client" or "Tell me when there are A cash deposit and more than $ 10,000 ".
This approach is appropriate to identify suspicious activities that were previously identified and tested, which is one aspect of regulatory compliance. But this reactionary approach often can not discover new methods carried out by criminals to launder money, commit fraud or use the financial system to facilitate other crimes.
To identify these more sophisticated financial crimes, credit unions should be able to look beyond the usual member information, identity, accounts and transactions of members. A broader vision could include other channels of information, such as phone calls, emails and social networking messages. However, the complex network of systems, geographical areas and disparate functions within financial institutions can hamper the collection and analysis of additional data.
One solution is to use advanced analysis software that can filter large amounts of data to identify suspicious behaviors. Advanced analysis software provides a higher level of protection against money laundering, searching for all available data and analyzing and merging them to create usable intelligence for investigators. With the detection of anomalies, advanced analyzes examine all available data and highlight the unusual relationships between accounts, customers and transactions. Identifies and alerts users to suspicious activities, such as remittances and unusual types of account interaction.
Derek Brown is Vice President / Americas for the Wynyard Group, which develops software to analyze financial crimes. Brown has more than 20 years of experience to help organizations gain commercial value from the effective use of technology and application of advanced analyzes in financial services organizations and crime agencies.
North Dade Community Development FCU was wound up in 2015 by the National Administration of Credit Unions due to violations. The crate had been hired to serve 56 in MSB areas at high risk. He has handled nearly $ 2 billion in financial transactions for money service businesses and the process fails to meet obligations against money laundering and terrorism in order to verify clients, filing reports, risk assessments Conduct, report suspicious transactions and maintain robust controls mitigate risks. Risks.
This case serves as a warning to credit unions that must rigorously monitor customers and related businesses can not use third parties to exercise due diligence and comply with the AML.
Fit-to-Purpose Compliance Program
A standard compliance program that fits all financial institutions does not simply exist, so each organization must develop a framework that meets their needs and culture. A first step for a caisse to build an AML compliance program is to conduct an overall risk assessment taking into account all products, services, customers, entities, transactions and geographic locations with internal controls put in place Mitigate the risks. Next, you should test and evaluate the effectiveness of their AML policies and procedures. Once you identify and strengthen weaknesses, credit unions can develop a unique and comprehensive view of members and risks.
KYC principles
The second key step is to consistently apply the principles of "knowing your client". An effective KYC program is one of the keys to preventing violations of regulations against money laundering strategies. This includes a client identification program below, which is designed to allow the background to form a reasonable belief that it knows the true identity of each member. The assessment of front-line member risks, as well as processes and procedures to understand the financial transactions of members, are designed to lead without knowing the wrong actors and become a conduit for money laundering.
It is essential to build an internal team to identify indications of money laundering activity. Financial institutions are required to designate an AML compliance officer and ensure that appropriate procedures are in place to allow employees to report suspicious activity. Accurate information means that unions and credit must document and follow procedures for transactions escalations clearly high risk, so that any employee of a credit union that you have a question or suspicion of a transaction knows how Assemble the string management. Contact (phone, e-mail, face to face or using the specific software application / system) and when to communicate (within what time frame).
Finally, credit unions should invest in the training of personnel responsible for managing funds and open accounts to ensure that these employees recognize the red flags of money laundering.
New threats, old tools
According to the Wall Street Journal, banks and smaller US credit unions are targeted by criminals trying to avoid the most sophisticated and rigorous controls used by large banks. Any attempt to detect new threats with outdated tools or security measures are not exhaustive leaves open to forms of crime and the evolution of financial institution findings by default.
Traditional AML technology solutions used by many institutions focus on customers, transactions and accounts to detect suspicious transactions. These systems adopt a standards-based approach based on a pre-defined set of fixed rules to identify known patterns of criminal behavior, such as "Tell me where the ID is used for a client" or "Tell me when there are A cash deposit and more than $ 10,000 ".
This approach is appropriate to identify suspicious activities that were previously identified and tested, which is one aspect of regulatory compliance. But this reactionary approach often can not discover new methods carried out by criminals to launder money, commit fraud or use the financial system to facilitate other crimes.
To identify these more sophisticated financial crimes, credit unions should be able to look beyond the usual member information, identity, accounts and transactions of members. A broader vision could include other channels of information, such as phone calls, emails and social networking messages. However, the complex network of systems, geographical areas and disparate functions within financial institutions can hamper the collection and analysis of additional data.
One solution is to use advanced analysis software that can filter large amounts of data to identify suspicious behaviors. Advanced analysis software provides a higher level of protection against money laundering, searching for all available data and analyzing and merging them to create usable intelligence for investigators. With the detection of anomalies, advanced analyzes examine all available data and highlight the unusual relationships between accounts, customers and transactions. Identifies and alerts users to suspicious activities, such as remittances and unusual types of account interaction.
Derek Brown is Vice President / Americas for the Wynyard Group, which develops software to analyze financial crimes. Brown has more than 20 years of experience to help organizations gain commercial value from the effective use of technology and application of advanced analyzes in financial services organizations and crime agencies.
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