Banks and other financial institutions entered 2017 facing an increasingly daunting framework of anti-money-laundering (AML) laws and regulations. During the past several years, regulatory agencies have been aggressively stepping up their enforcement actions, and they’ve levied huge fines for compliance failures.

For instance, the New York State Department of Financial Services (NYDFS)1 and the UK Financial Conduct Authority2 recently issued penalties of more than $600 million for AML failings at Deutsche Bank from 2011 to 2015 in connection with securities trades originating in Russia. In addition, the Financial Industry Regulatory Authority’s 2017 Regulatory and Examination Priorities Letter3 indicated that AML will remain a focus—especially in areas where the agency has observed shortcomings. The letter expressed specific concern about lapses in data integrity and inadequate surveillance systems that have caused gaps in firms’ automated trading and money movement surveillance systems.

Having a comprehensive compliance program in place is becoming more critical than ever. Here are five steps financial institutions can take in 2017 to confront today’s growing challenges.

  1. KEEP ABREAST OF CHANGES AND NAVIGATE THEM DILIGENTLY AML rules and regulatory expectations are constantly evolving, and financial institutions have to make sure their compliance programs keep up with each new change. Heading into 2017, financial institutions should review their AML programs, assess their effectiveness, and enhance them as necessary. For example, they have to address recent regulatory changes like the NYDFS anti-terrorism and anti-money-laundering rule,4 which requires that regulated institutions ensure that their transaction monitoring and filtering programs are designed to comply with regulatory standards and expectations. Another recent regulatory change from the NYDFS says financial institutions must adopt and submit either an annual board resolution or a senior officer compliance finding that confirms compliance with the NYDFS regulation beginning April 15, 2018.5 

For more, download this report.

Download Report

1 www.dfs.ny.gov/about/press/pr1701301.htm.
2 www.fca.org.uk/news/press-releases/fca-fines-deutsche-bank-163-million-anti-money-laundering-controls-failure.
3 www.finra.org/industry/2017-regulatory-and-examination-priorities-letter.