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Banks, insurers and capital markets firms’ anti-money laundering (AML) compliance programs are based on policies, standards, processes and procedures to address the firm’s risk profile, and monitor and control its AML risk.  The differing regulatory regimes supervising global firms tend to result in a regional or local focus on AML compliance programs, but the increased complexity of regulations–and heightened scrutiny from regulators–have prompted financial institutions to increase their spending on AML compliance globally, particularly in areas related to adherence to multiple regulatory regimes.

We believe that consistent, enterprise-wide frameworks can help firms in making consistent AML risk decisions, and lessen spend on AML regulatory compliance.  While customized, detailed policies and standards are often developed for the specific needs of a particular region or line of business, this can result in arbitrary approaches to implementing AML compliance programs, and duplicative implementation costs.

As firms seek enterprise-wide clarity and consistency, we are seeing a shift in focus toward reducing jurisdictional variance in policies and standards.  Firms can transition toward enterprise-wide standards by identifying and leveraging standards that are already multi-regional and that cross lines of business.  A structured approach can encourage the rigor needed to identify and migrate individual standards into an enterprise-wide framework.  Such a framework can serve as a competitive advantage for financial institutions, supporting a cost effective and consistent response to financial crime threats and adherence to AML regulation.

In this series of blogs, I will discuss why firms should establish an enterprise-wide AML standard and will also describe key steps in the implementation of agreed standards that span multiple regions and lines of business.

For more information, view our presentation on the need for a global consistent standard for anti-money laundering compliance.