As a business owner, you are likely aware of the increasing importance of Anti Money Laundering (AML) compliance. With the Financial Conduct Authority (FCA) imposing heavy fines for non-compliance, it is crucial for businesses to stay on top of AML regulations ...
- Invest time conducting your risk assessment
One of the central themes of the FCA's AML requirements is the need for regulated firms to provide evidence of conducting risk assessments on their customers. To comply with this, businesses must take a dynamic approach to mitigating risk.
This means tailoring risk assessments to individual clients and having measures in place to manage and prevent potential risks. It is not enough to simply have a risk assessment in place; businesses must also be able to demonstrate the steps taken to address identified risks.
- Prioritise Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) during onboarding
Effective customer onboarding is not only important for attracting and retaining clients, but also for identifying and managing risks. By conducting thorough CDD and EDD during the onboarding process, businesses can identify any potential risks at the earliest stage possible. This allows for the implementation of appropriate measures and safeguards to prevent money laundering.
- Commit to ongoing risk monitoring
It is important for businesses to recognise that the risk of money laundering does not end once a customer is onboarded. To protect your business and comply with regulations, it is crucial to conduct periodic reviews of existing client accounts. This allows for the identification of any changes in risk and the implementation of appropriate measures to mitigate these risks.
- Provide adequate staff training for CDD
The FCA has identified a lack of informative and tailored training as a common reason for employees being charged with due diligence infractions. To avoid this risk, businesses must ensure that their staff receive robust, effective, and relevant training on AML regulations and financial crime risks. This not only helps with compliance, but also protects the business from financial and reputational loss.
- Follow remediation plans through to completion
In the event of any compliance deficiencies, it is important for businesses to have a plan in place to address and rectify these issues. This includes conducting a thorough assessment of AML processes, systems, and controls, and implementing remedial plans to address any deficiencies. It is crucial for businesses to follow through with these plans and ensure that they are completed in a timely and effective manner.
Staying on top of Anti Money Laundering regulations is crucial for businesses in the financial services sector. With the FCA implementing stricter measures in 2024, it is important for businesses to take a proactive approach to compliance.
Businesses that prioritise due diligence during onboarding, commit to ongoing risk monitoring, provide adequate staff training, and follow through with remediation plans can protect themselves and their customers from the damaging effects of money laundering.
Stay informed, stay compliant, and safeguard your business in 2024 and beyond.
If anything I've written here resonates with you, call me on 01604 420057 and let's see how we can help you.