14 September 2022, 11:41
Tagline
14 September 2022, 11:41
Tagline
Asset managers and asset management firms must prioritize financial crime prevention and AML regulation. With stricter requirements and regulations globally, compliance is becoming more complex.
Many firms must improve their AML controls, customer due diligence, and enhanced due diligence. AML regulations require ongoing monitoring of business relationships and transactions.
For an asset manager AML Compliance doesnt need to be complex or time consuming. Many Asset Managers don’t report suspicious activities at all. As AML Regulation and has increased tremendously so has recent AML Requirements in most organisations.
Asset Managers are also required to assess whether their customers’ activities are consistent with the firm’s knowledge of that customer, and their risk profile, ensuring that CDD records are kept up to date accordingly.
And while anti money laundering (AML) is not jus a word it is a huge step for many organisations to adopt a risk based approach while performing Risk Assessments and improve their Risk Management. No matter if Customer KYC (Onboarding) or Transactions Monitoring and Ongoing Compliance due to Enhanced due diligence requirements. Financial crime is a field where Criminals aren’t sleeping and organisations need to apply a risk based approach.
Recently MAS Singapore has reviewed their strategic advice for Asset Managers how to Comply with AML Regulation.
Effective Transaction Monitoring enables asset managers to comply with law and detect and report suspicious transactions.
Nevertheless, at most asset managers, Transaction Monitoring still is performed manually by the compliance function and largely on an individual account basis.
Thus, Transaction Monitoring is still a challenge and an area of weakness.
Manual monitoring is associated with high effort for the Asset Managers and results also in a time consuming, inefficient manual task.
The type and level of sophistication of transaction monitoring systems and controls implemented by the Asset Manager (manual, automated, or semi-automated) is typically dependent on the nature, scale, and complexity of an Asset Manager’s business activities.
The timely review and investigation of transaction monitoring alerts, and recording the results of those investigations, are paramount to ensuring the effective operation of transaction monitoring systems and controls.
Therefore, transaction monitoring is in some cases carried out only once a month or quarterly as part of the asset manager AML task.
This is limited to the monthly reconciliation of the trading records with the bank’s records and a manual process.
Furthermore, no uniform rules are set by parameters or thresholds. These can identify unusual transactions with a reasonable degree of certainty about possible money laundering that warrants further investigation. And no frequency of reviews is adapted to the different risk profiles of their customers. Moreover, there is often a lack of overall 360 Customer view – most Asset managers do not monitor the transactions of multiple managed accounts owned by the same client/bank.
Transactions Monitoring can range from daily ‘real-time’ system-generated transaction monitoring alerts to retrospective transaction monitoring carried out manually. However, at most firms, transaction monitoring arrangements are poorly documented due to having no Transactions Monitoring in place.
If you want to perform ad hoc and instant AML Checks and Risk Assessments, CheckAML can support you to perform CDD and EDD on your customer.
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