Anti-money laundering (AML) has been an important aspect of compliance activities and processes in the financial services industry for over a century. As the global financial system has grown more sophisticated and complex, AML has become significantly more important. This increased importance has made complying with AML regulations a critical element of governance, risk, and compliance (GRC) management for financial institutions.
AML enforcement and fines for failing to apply and/or maintain proper controls have been increasing, and it is of the utmost importance for organizations to implement a framework and technology architecture that can sufficiently support compliance enterprise-wide.
Leveraging GRC tools and processes in your anti-money laundering program is not only a matter of compliance but also impacts your institution’s bottom line. AML compliance penalties are often very hefty—nearly half a billion USD in some cases—and carry reputational risk. Although penalties that large are not the average, it is fairly common for fines to reach the eight- to nine-figure range.
Implementing a GRC framework helps financial institutions:
Financial institutions are confronting a serious challenge in fighting money laundering activities. Regulatory bodies have instituted a bevy of different requirements and procedures to assist organizations in preventing and detecting such nefarious activities. To remain compliant with AML regulations, organizations need to build an integrated risk and compliance framework. Implementing GRC processes supported by a flexible technology solution equips institutions with the tools and data they need to make informed risk management decisions and keep pace with regulatory change.