The Patriot Act requires that employees of financial institutions receive anti-money laundering (AML) training on an ongoing basis. There is little additional guidance provided in the Patriot Act. In some firms the training is delayed and/or mixed in within other continuing education requirements which may have the undesirable effect of diluting the training.In some cases the training may actually be an afterthought where the AML compliance officer may quickly put together a presentation. This scenario often unfolds something like this: Employees are pulled away from their daily work to take the training and they are a little put out due to their lost productivity. The training often consists of a PowerPoint presentation that details what happened to another company – quite possibly outside of the particular industry – when they did not have an adequate AML program. The presentation concludes without any questions and employees return to their daily work and do not think about AML issues until the process is repeated.
The AML compliance officer has missed a great opportunities to set the firm's AML agenda and create a vibrant functional AML program within the organization. Furthermore, this type of training could be putting the institution at risk because regulators are noticing that money laundering activities do occur at all types of financial institutions and are now more vigorously reviewing the AML program – even in routine exams.
Annual training provides the AML compliance officer with an opportunity to educate all of the institution's employees regarding basic AML principles, recognizing AML red flag patterns, AML risks that the firm faces, identifying potential suspicious activity and protocol for reporting identified activity. Leveraging the annual training to achieve such strategic objectives is time well spent. The following tips provide information on how some institutions have effectively leveraged their annual training to promote a culture of AML awareness in the firm.
Plan content that is audience appropriate
Employees at a Broker/Dealer or Money Services Businesses (MSBs) may not correlate the importance of customer identification or the risks of accepting cash based on the regulatory actions taken against a bank. MSB employees will better comprehend actions that result from sting operations where law agents/auditors pose as clients and test their adherence to company policies and procedures. Broker/Dealer employees will understand the significance of accepting fraudulent securities into a client account.
Training that helps employees understand that policies and procedures protect both the individual employee and the firm, will most likely exercise greater care in their daily activities.
Train in smaller groups
Most financial institutions have several departments that each has slightly different AML responsibilities. Training in smaller groups allows for a deeper specialized training for that particular group. The new account processing team will be very concerned with the source of funds and CIP requirements, where the disbursement team will be more concerned with patterns of deposits and withdrawals, suspicious withdrawals and destination of funds. The AML compliance officer can train to those specific topics and build a solid rapport with the team.
Staying on target
While training in smaller groups requires a greater time commitment from the AML compliance office, it benefits the individual employee. Another way to ensure that training meets the target audience's needs is the distribution of AML themed quizzes to employees. The results conveyed back to the AML compliance officer provides additional feedback on topics to be covered in future training sessions.
Employees that understand how AML policies and procedures impact their daily work and have a rapport with the AML staff are more likely to be aware of issues that should be reported to the AML staff. The results of the training can be quantified by measuring the difference in issues reported before and after an alteration in the training program.
Sterling Broadbent, owner, Sterling ComplianceServices, Austin, Texas, USA, firstname.lastname@example.org