Firms Must Be Proactive in Implementing New AML Law to Mitigate Risks
In the face of increasingly complex financial crime threats, firms must take a proactive approach in implementing the new Anti-Money Laundering (AML) law to ensure they are fully aware of potential risks and vulnerabilities. This includes periodically training staff on the new law and its implications from a business, risk, and compliance perspective.
A Robust AML/CFT Culture is Essential
According to experts at PwC Vietnam, a robust AML/CTF culture is essential for effective oversight and management of ML/TF and Sanction risks. Senior management must have timely and actionable information to perform effective oversight.
Implementing the New Law: Key Considerations
- Periodically training staff on the new law and its implications from a business, risk, and compliance perspective
- Ensuring conformity to data requirements structures, which will provide a solid foundation for scenario functionality, user interface display, and overall application functionality
- Data accuracy and completeness are crucial for an effective AML technology system
- Interaction with upstream and downstream applications such as core banking platforms, case management systems, and management information systems is also essential
- Sufficient resources with required skills and experience are necessary to conduct effective assessments and refinements of the system
Effective Governance and Oversight
Good governance and strong oversight of outsourced functions are critical in ensuring that service providers meet standards required by the firm’s internal regulations and local regulations on AML/CTF and proliferation of weapons of mass destruction. This can free up highly skilled and experienced financial crime risk and compliance resources to focus on higher-risk transactions and activities.
- Risk-focused quality assurance program is essential, varying the frequency and intensity of monitoring to the level of risk identified
- Governance and operating model for this program must be independent, with appropriate reporting lines to escalate issues or weaknesses across the enterprise-wide AML/CTF framework to senior management
Effective Investigation and Reporting
Investigations into suspicious transaction alerts generated by transaction monitoring systems must be conducted by staff adequately skilled and experienced in identifying and assessing criminal activity. A list of minimum standards for investigations should be established to maintain quality and accuracy.
- Using a well-designed, calibrated, and risk-based transaction monitoring system will permit investigators to focus on specific scenarios that triggered the risk alerts
- Effective outsourcing programs and quality assurance programs are also essential components of an effective AML/CTF framework
Conclusion
In conclusion, firms must take a proactive approach in implementing the new AML law to mitigate risks and ensure compliance with local regulations. By establishing good governance, conducting effective quality assurance, and promoting a robust AML/CTF culture, firms can effectively manage ML/TF and Sanction risks and maintain a strong reputation in the market.
Contact
Hiran Cabraal Director, Financial Crime Risk Consulting Service PricewaterhouseCoopers Consulting (Vietnam) Ltd Email: cabral.hiran@pwc.com