Monday, 20 January, 2020 – 01:15
It’s the everyday challenge for the financial crime risk officer.
There is something he’s not satisfied with but he can’t prove it – it’s his experience, what some call his “gut reaction” that says “this doesn’t stack up. We shouldn’t do this business.”
But there are reasons why the business should be done.
There is a fundamental imbalance and, incredibly, a fundamental irony.
We all know the situation. A risk assessment just doesn’t smell right but there is nothing specific to prove that the customer, or the transaction, are too high risk and should be declined.
Even 25 years into a global financial crime risk and compliance regime for money laundering, terrorist financing and more is increasingly looking like an experiment that isn’t working as well as it was hoped, it is still the case that recommendations by the sales team are given at least the same weight as those of a financial crime risk officer.
Of course, businesses want to earn when they can and in the absence of evidence, there is a good argument that they should be able to.
But there’s another dimension – risk is often nebulous, it’s almost always based on suspicion, even if that suspicion has no clear evidential base; sales are quantifiable and profit predictable.
At its heart, then, it’s a tussle between the certain and the possible; a certainty against a gamble. It is the ultimate irony, in our field, that it’s the certainty that creates the risk of criminal conduct while it’s the gamble that removes that risk.
This is why we all need to understand, in detail, all about how we and others react to circumstances.
It’s why I researched and wrote “Understanding Suspicion in Financial Crime.” It’s a big book and it’s challenging even though the style and language are deliberately as easy as I could make it.
It’s the sales team and the directors who need to understand why that irony has to be understood – and assessed. And why, if a financial crime risk officer, responsible officer, money laundering reporting officer (MLRO), compliance officer or whatever title he holds, he’s given has personal responsibility. No matter what, his decision must be final because his failures cannot be insured or indemnified.
And it’s why, top to bottom, organisations require in-depth education and awareness where law and regulation are part of an overall system of training to protect both the officer and the company.
That’s why I’ve spent more than two years developing the next generation of education across not only the financial sector but beyond. At www.financialcrimeriskandcompliancetraining.com we are taking education to a level never before seen.
We will be launching the first batch of courses on 02.02.2020 and we will add more courses regularly.
We aim to provide education outside the usual boundaries, outside the financial sector so that prospective customers already know about why financial crime risk and compliance policies and procedures are imposed even before a business relationship.
We will provide extensive risk management education for groups outside the regulated sector – in mid March we will launch an extraordinary course for teenagers and young people, for a pocket money price, which will explain to them many ways in which criminals target them and abuse them, even to the point of turning them, themselves, into criminals.
For more information, please visit www.financialcrimeriskandcompliancetraining.com