Finance
Accountants in action: Top tips to protect your firm against money laundering
Global Banking & Finance Review®
Company
By Simon Luke, Country Manager First AML
With 70% of accountants and lawyers becoming more concerned about money laundering since the Ukraine-Russia conflict, it’s no surprise that these professions are searching for a “north star” for their compliance programmes.
While most accountancy firms are anti-money laundering (AML) compliant, many still pay hefty penalties for not meeting their obligations or adequately managing their risk. The Russian conflict escalates this situation, leaving accountants vulnerable to external pressures.
In light of Russian sanctions and the growth in online transactions, momentum on the importance of compliance is building, mainly focusing on the need for a robust onboarding process. With 75% of accountants prioritising AML protocols on their agendas, technology-led solutions are fast becoming a core lifeline for accountants. 91% of firms are now looking to embrace technology to align with tighter AML regulations.
Here’s how accountants can do the right thing regarding their anti-money laundering processes.
Tech will help
Relying on manual processes can be time-consuming, leaving less time for revenue-generating activities. They can also leave firms exposed to mistakes and inconsistency when implementing their AML policy.
When it comes to carrying out Customer Due Diligence (CDD), technology-led systems play a pivotal role in creating a better onboarding experience for clients.
Accountants with the most robust compliance programmes typically combine technology-led solutions with human AML experts, who can sift and interpret results and make informed decisions with high-quality data.
Outsourcing admin and complexity
53% of accountants are already looking to outsource parts of their compliance programme, particularly regarding the complex world of client onboarding. There is an unconscious conflict when juggling full CDD compliance and onboarding clients as quickly as possible to do business. Outsourcing CDD can help remove the pressure of complying with AML regulations whilst providing a savoury experience for your clients. When an expert third party manages the onboarding, they consistently ensure that relevant requirements are met.
Although deploying the CDD grunt work to an “outsider” might appear daunting at first, ultimately, it can be a valuable tool for firms as they can outsource the administrative and complex tasks involved with CDD, not risk decisions.
Collecting and verifying documents or investigating the ultimate beneficial ownership of new clients is a time-consuming and challenging CDD task for firms. Compliance officers should be spending their time making informed risk-based decisions, not bogged down with burdensome tasks.
Instilling a culture of compliance
Firms still need to create a broader culture of compliance. Instead of companies just doing the bare minimum to avoid the threat of fines, accountants should take an active role in upholding high ethical standards across the industry.
Our research revealed that the core reason for money laundering climbing agendas is a focus on customer transparency and ethical customer onboarding (68%). With the global geopolitical situation as strained as ever, AML should not just be the concern of one department or group. Instead, AML standards should be a matter of personal responsibility for all employees.
Recent events have highlighted the real-life impact of money being able to be funnelled into the coffers of bad actors. Creating a robust compliance culture with technology-led AML systems can help the accounting sector become more effective gatekeepers of the UK’s financial system.
Anti-money laundering (AML) refers to laws and regulations aimed at preventing the process of making illegally obtained money appear legitimate.
Customer due diligence (CDD) is the process of verifying the identity of clients to assess their risk for money laundering or terrorist financing.
Compliance in finance involves adhering to laws, regulations, and guidelines set by governing bodies to ensure ethical and legal conduct in financial practices.
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