Seven crucial steps to master your AML/CTF independent review


Australian RegTech firm Arctic Intelligence recently outlined the seven key steps for an independent review of their AML/CTF program.

Developing a strong AML/CTF compliance programme is pivotal for successful independent reviews. Essential components of this programme include coherent and integrated policies, logical and defendable risk assessments, competent employee training, established transaction monitoring systems, and board-level governance.

A solid AML/CTF programme not only showcases your dedication to countering money laundering and terrorist financing activities but also underscores your capabilities. It’s noted that several organisations simply give “lip-service” to AML/CTF without genuine commitment.

The success of your AML/CTF review largely depends on selecting an experienced independent reviewer. This reviewer should possess a blend of relevant skills, qualifications, and hands-on experience, optimally using technology for enhanced efficiency. The reviewer should have expertise in AML/CTF regulations across all operational regions, risk management, and compliance frameworks. Due diligence in verifying their credentials, reputation, and past performance is crucial. Interestingly, it’s still observed that some reviews are “influenced”, downplaying recommendations.

Preparation is essential before initiating the AML/CTF independent review. Assemble all pertinent documents such as business unit policies, ML/TF risk assessments, training records, internal audit reports regarding the AML/CTF programme, and any communication with regulators. Keeping up with regulatory changes and organising an internal pre-audit can help anticipate and rectify potential issues, setting a remediation plan in motion.

Forbes highlights that the modern challenge for compliance teams lies in managing compliance across sprawling, interconnected businesses. This challenge is surmounted with effective communication amongst key stakeholders. Businesses should foster transparent communication with the independent reviewer, granting them complete access to the required resources and personnel for a thorough review.

Consistent monitoring and testing of AML/CTF controls can pinpoint discrepancies in your compliance programme. Addressing these discrepancies ahead of the independent review demonstrates a commitment to continual enhancement. Maintaining evidence of the corrective measures taken is vital.

Compliance training is now more imperative than ever. Quality training not only safeguards organisations against potential regulatory breaches but also empowers employees. Tailored training for specific roles and timely education on emerging AML/CTF regulations ensures staff remain proactive, enhancing the likelihood of spotting suspicious activities and complying with requirements.

Prompt responses to suggestions and findings during the review can bolster your compliance programme. Addressing these swiftly, documenting your responses, and charting any remediation plans exhibits your dedication to regulatory compliance.

A successful AML/CTF independent review necessitates proactive strategies, ample preparation, and clear communication. RegTech can further streamline processes and automate controls, assisting businesses in gauging compliance effectiveness. Implementing control tests, mapping policies, and utilising analytics can provide actionable insights. A well-conducted review not only ensures regulatory compliance but also reinforces a business’s reputation and credibility.

Read the full post here.

Copyright © 2023 RegTech Analyst

Enjoyed the story? 

Subscribe to our weekly RegTech newsletter and get the latest industry news & research

Copyright © 2018 RegTech Analyst


The following investor(s) were tagged in this article.