Where Are the Gaps in Your Compliance Plan?

In a recent ACAMS Today, different polls performed across several compliance practitioners showed a wide range of root causes for potential gaps in related compliance programs.

Celina Pablo
2 min

"The world of fantasy fills the gaps in people's knowledge."

This quote from French historian and archaeologist Fred Vargas sums up a common industry problem: building a robust, seamless Financial Crime Risk & Compliance framework.

In a recent ACAMS (Association of Certified Money Laundering Specialists) Today article titled Measuring the Effectiveness of your AML program, polls performed across several compliance practitioners showed a wide range of root causes for potential gaps in related compliance programs. More than half (52%) of responses blamed a lack of adequate technology and ongoing monitoring.

The Root Causes

Other causes quoted in the poll were:

  • 39% data governance & quality
  • 29% risk assessment
  • 27% training
  • 20% risk & compliance governance

While it would be too risky to concentrate solely on the lack of adequate technology, the reality is that professionals consistently perceive it as the most influencing factor in flawed, incomplete, or ineffective programs. Additionally, it's no surprise that the lack of adequate data to feed the systems or tools in question comes significantly closer. This underpins the adage that bad data leads to bad insights and decisions even when flowing through the best-automated systems.

Technology & Monitoring

Financial institutions and FinTech firms are frequently forced to face challenges derived from legacy tools, system integration, and data quality. To make things worse, they must tackle Financial Crime in all its variants within a fast-evolving, highly complex environment.

Financial Crime risk mitigation cannot be applied to a single area of an actor's lifecycle. For example, deploying a highly effective KYC tool will only obtain partial results if coupled with old, legacy transaction monitoring solutions. Compliance teams should holistically apply technology to Financial Crime; it must be connected and aligned with other elements such as regulatory requirements, risks, and typologies impacting the business. Lastly, it must be flexible enough to adapt to the fast-evolving environment and be governed and controlled so that dependencies are kept at bay.

Financial Crime needs tools that detect anomalies at any time, including on an ongoing basis. Functional-based systems (i.e., KYC, Transaction Monitoring, Case Management) communicate so models are constantly evolving, or a single platform can host and monitor those segments from a central perspective. The result is a combination of well-trained, calibrated machine and human elements, where one complements the other in what some authors define as "augmented intelligence."

Augmented Intelligence (AuI) effectively fuses the power of intelligence with automation, leaving machines to process essential but time-consuming low-level tasks. At the same time, humans oversee decision-making strategy and put together all the elements that typically conform to a complex investigation. It essentially makes Artificial Intelligence faster and smarter, contributing to closing the gap between compliance programs and criminals.

The development of AuI-powered solutions also helps mitigate "alert fatigue": the degrading of capabilities driven by poor user experience (UX) systems coupled with a monotonous, seemingly endless review of high volumes of alerts that drive little or no outcome. Adopting systems that work for compliance staff is vital to keeping high but balanced levels of efficiency (how can we best maximize workforce, tools, and budgets) and effectiveness (how good we are at fighting).

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