Each institutionís AML program varies based upon the risks presented by its customers
To Scott Talbott financial institutions should conduct risk assessments and implement systems that are designed to mitigate specific identified risks, rather than solely relying on general AML programs/systems.
Do you think financial firms dedicate enough resources in the prevention of money laundering?
Yes. Financial institutions dedicate substantial resources in terms of dollars, human capital, computer systems, and working with regulators and law enforcement agencies, complying with U.S. AML requirements.
How do financial institutions monitor money laundering?
Generally, financial institutions designate compliance officers for AML and establish AML compliance programs. It is the purpose of the AML compliance officer to get up everyday and focus on preventing money-laundering. Each institution’s AML program varies based upon the risks presented by its customers, its mix ofproducts and services, as well as size and geographic footprint. Customer due diligence and transaction monitoring are key components of AML monitoring programs.
What do you think is the biggest weakness that the financial institutions have in money laundering prevention and how they can improve it?
The biggest weakness may be the challenge to fully assess risk presented by a continuously changing AML environment. To combat this, financial institutions conduct regular risk assessments to confirm that its AML personnel and programs properly mitigate the AML risks facing the institution.
Are there any new challenges that Wall Street firms are facing right now in money laundering prevention? (If there are please explain us which ones)
Criminals are continuously seeking new ways to break the law. The internet, mobile banking, and the interconnected global economy, all present challenges individually, as well as collectively.
What are the most common Anti-Money Laundering control deficiencies that you see more in the financial institutions?
Given the constantly changing environment, financial institutions should conduct risk assessments and implement systems that are designed to mitigate specific identified risks, rather than solely relying on general AML programs/systems. Further, institutions should have a strong AML internal audit program to identify deficiencies.
Do you think there should be some kind of alignment between some areas or factors in the financial firms so they can be successful in the battle against money laundering?
AML compliance should have a top-down approach within firms – senior management should set the tone at the top. Additionally, although it will be different for each institution, the compliance, risk, legal and audit departments should work cooperatively to develop appropriate policies & procedures for monitoring, testing and reporting, to prevent money laundering.
After several scandals of money laundering in banks, do you think there still are many rules to prevent money laundering that are being violated by the financial institutions?
No. Financial institutions do not purposely or knowingly violate any regulations or laws, including AML rules. Financial institutions actively and continuously seek to test their compliance with AML rules, in spite of the related compliance costs and impact on profitability. Moreover, avoiding regulatory actions, criminal and civil penalties and reputational risk just makes good business sense for financial services firms.
About Scott Talbott,
He is the Senior Vice President for Government Affairs at The Financial Services Roundtable, where he manages the daily legislative and regulatory advocacy efforts. Talbott serves as counsel to the organization and runs the Roundtable’s Political Action Committee.
Once named NPR’s favorite bank lobbyist, Scott is a frequent contributor to both national and local media. In 2010, he appeared in the Oscar-winning film Inside Job about the economic collapse of 2008.
Scott Talbott joined the Roundtable in 1994 after working in the tax departments of Arthur Andersen and Ernst & Young. He received his B.A. from Georgetown University, cum laude, and his J.D. from George Mason University School of Law.