AML Supervisory Technology

FIRST CLASS TECHNOLOGY

Effectively meeting the needs of AML Supervisory Bodies with cost efficiency in mind.

NURTURE & GROW

With the right technology, Supervisors can strengthen AML compliance frameworks.

Supervisory technology allows Professional Body Supervisors to understand the AML/CFT risks at the single business entity level, as well as identifying and analysing risks collectively across its entire sector.

Vendors of AML software are disproportionately providing solutions in the areas of KYC and transaction monitoring.

AML360 provides solutions for the full lifecycle of money laundering compliance for both AML Supervisors and businesses that are regulated under AML laws. There is no other provider, globally, that is providing this capability.

The benefits of partnering with AML360 is an end-to-end system and having all data centralised and managed in one location, from a single login.

Governance

The Office of Professional Body Anti-Money Laundering Supervision (OPBAS) expects a Professional Body Supervisor to clearly allocate the responsibility for managing its anti-money laundering supervisory activity.

OPBAS examples of good practice:

there is evidence of issues related to anti-money laundering supervision being escalated appropriately;
the professional body supervisor can identify the population they supervise who are subject to the requirements of the Money Laundering Regulations 2017;
decisions related to anti-money laundering supervision (such as the approval of risk assessments or the initiation of enforcement investigations) take place at an appropriate level of seniority.

Section 49 – Duties of Self Regulatory Organisations (2) Self-regulatory organisations must— (a) provide adequate resources to carry out the supervisory functions; (b) appoint a person to monitor and manage the organisation’s compliance with its duties under these Regulations.

AML360’s consultants are experienced by profession in the private and government sectors, and hold AML compliance qualifications to assist supervisory bodies design their AML compliance framework.
We work closely with the supervisor’s representatives to ensure the SupTech solution is delivered as a ‘ready-to-go’ platform.
AML360’s supervisory technology is able to match the supervisor’s monitoring framework to its regulatory objectives, then align these objectives to the risk profiling of its members. This capability is known as a hybrid RegTech/SupTech solution and is next generation technology.
AML360’s analytical filters allow identification of red flags and ongoing monitoring for management of those matters requiring escalation.
AML360’s case management feature can be applied to escalated matters so that reporting, tracking and monitoring occur.
As AML360’s system is extremely flexible, applying amendments to an existing oversight framework is easily implemented and becomes immediately effective. Such amendments may follow updates or guidelines form OPBAS, FCA, Treasury or the EEU.

Risk Assessment by Supervisory Bodies

Professional Body Supervisors should act in a manner that supports the application of a risk-based approach by their membership.

An effective risk-based approach to anti-money laundering will require a regular appraisal and review of the risks. This will be provided by an assessment of where the money-laundering risks are greatest.

This assessment should not be static. It will change as circumstances develop and threats evolve. Professional Body Supervisors’ resourcing model and approach should be reflective of this.

Regulation 17(4) requires a professional body supervisor to develop, and record in writing, risk profiles for each relevant person in its own sector.

Regulation 17(5) says this may be a single risk profile for a cluster of its members, although, if so, Regulation 17(6) requires the appropriateness of that clustering to be kept under review. When preparing risk profiles, a professional body supervisor is required to review the risk profiles developed at regular intervals and following any significant event or developments which might affect the risks to which its own sector is subject (Regulation 17(8).

National, sector and member risk assessments can be carried out.
Risk profiles for every member is recorded within the supervisor’s register.
The full risk reports for each member can be accessed from the register and downloaded to PDF for external reporting.
AML360’s analytical filters are available to easily identify percentage volume of members within certain risk categories.
AML360’s filters allow drill-down analysis which can be applied for determining supervisor activity and conducting thematic reviews.
AML360 has a separate case management register which is available for recording and tracking supervisor activity for member entities.

Risk Based Approach

Adopting a risk-based approach to supervising a professional body’s members’ anti-money laundering policies, controls and procedures allows the professional body supervisor to shift resources to areas with a higher money-laundering risk.

An effective risk-based approach to anti-money laundering will require a regular appraisal and review of the risks.

This assessment should not be static. It will change as circumstances develop and threats evolve.

Professional Body Supervisors should use their powers in a way that supports the adoption of a risk-based approach by their members.

Regulation 46(2)(a) of the Money Laundering Regulations 2017 requires a professional body supervisor to adopt a risk-based approach to the exercise of its supervisory functions, informed by the risk assessments carried out under Regulation 17.

AML360 SupTech evaluates risk, based on quantitative and qualitative data.
AML360 evaluates risk at three levels – overall risk, division risk and driver risk.
There are no limitations to the type of risk to be analysed.
Attractive heat maps can be refined for data analysis at each level of risk.
Data reports can be comprehensive or summarised. Both levels incorporate risk traffic lights, allowing readers to be fully informed.

Designing and Implementing a Risk Based Approach

A risk based approach relies on a sound understanding of the nature of the risks and a regular risk assessment can help this.

Professional Body Supervisors should develop a means of identifying which members or clusters of members are at the greatest risk of being used by criminals to launder proceeds from crime.

This assessment should be updated on an ongoing basis.

The Office of Professional Body Anti-Money Laundering Supervision examples of good practice:

risk assessment is a continuous process based on the best information available from internal and external sources;
a professional body supervisor assesses where risks are greater and concentrates resources accordingly.

Regulation 17(1) of the Money Laundering Regulations 2017 requires a professional body supervisor to identify and assess the international and domestic risks of money laundering and terrorist financing to which its own sector is subject to.

AML360 SupTech provides a simple and streamlined approach for measuring, monitoring and reporting risk.
Updates to any risk framework can be immediately administered and active.
AML360’s filters provide easy analysis of large data to quickly interpret risk status.
Heat maps and data reports can be downloaded to PDF for external reporting.
AML360 SupTech has been developed as an evidence based, risk management and AML compliance system.

Supervision

The supervisory tools of Professional Body Supervisors must be able to compare a member’s anti-money laundering arrangements with those of its peers, with a view to informing its judgment of the quality of the member’s controls.

Examples of good practice:

supervisory activity is underpinned by an evidence-based understanding of the different types of business the professional body supervises;
supervisory activity is adequately-resourced, including the use of appropriate technology, to allow consistent, good-quality, timely decisions;
the choice of different supervisory tools is tailored to each situation, with due consideration given to the cost-effectiveness and proportionality of the different options.

Regulation 46(1) of the Money Laundering Regulation 2017 requires a professional body supervisor to effectively monitor its own sector and take necessary measures for the purpose of securing compliance with the requirements of the Regulations.

Regulation 46(2)(c) requires a professional body supervisor to base the frequency and intensity of its on-site and off-site supervision on the risk profiles prepared under Regulation 17(4).

Regulation 46(4) requires a professional body supervisor to, in accordance with its risk-based approach, take appropriate measures to review:

the risk assessments carried out by relevant persons;
the adequacy of relevant persons’ policies, controls and procedures, and way they have been implemented.

Regulation 49(1)(b) requires a professional body supervisor to make arrangements to ensure sensitive information relating to the supervisory functions is appropriately handled within the organisation

Case management for recording senior management meetings.
The ability to carry out desk based reviews of a members policies, procedures and controls, eliminating the need to go onsite.
Questionnaires requesting information from a member about its money laundering arrangements.
Periodic information returns: members can be required to regularly submit information that the professional body supervisor considers necessary to aid the performance of its supervisory functions.
Thematic work: professional body supervisors might look to involve a number of members in a project to consider a particular aspect of anti-money laundering arrangements.
Outreach work: engagement with Money Laundering Reporting Officers’ membership groups to discuss findings, concerns and challenges in the sector.
Review of a member’s case files: (covering customer due diligence checks or decisions related to the submission of suspicious activity reports) this can allow analysis of past decisions made while implementing anti-money laundering controls.

Record Keeping

A Professional Body Supervisor will maintain records of significant decisions related to its anti-money laundering supervision, documenting the reasons for action.

The documentation should be sufficiently thorough to allow ex-post understanding of the justifications behind the decision to be taken as part of quality assurance testing by, for example, The Office of Professional Body Anti-Money Laundering Supervision or internal auditors.

Moreover, professional body supervisors will document their supervisory action (e.g. notes for record of meetings, file review logs) to ensure an adequate record is maintained.

Examples of good practice:

quality assurance checks on anti-money laundering supervision activity are risk-sensitive in nature

Regulation 46(2)(d) of the Money Laundering Regulations 2017 requires a professional body supervisor to keep a record in writing of the actions it has taken in the course of its supervision, and of its reasons for deciding not to act in a particular case.

Regulation 17(3) requires a professional body supervisor to keep an up-to-date record in writing of all the steps it has taken under Regulation 17(1).

Regulation 17(4) requires a professional body supervisor to record its risk profiles in writing.

AML360 eliminates the need for physical paper. In doing so, accessing and managing data in an electronic format remains readily available 24/7 and is consistently in an organised and coherent display.
In a simultaneous action, AML360 SupTech gathers data, measures, reports and digitally records results in a risk register.
AML360’s case management register allows tasks to be set at different priority levels with deadline dates.
Responsible persons can be assigned for oversight and varying permission levels applied.
AML360 has a feature that tracks open and closed cases, including a heat map to identify the level of priority cases.
AML360’s risk register includes a separate file note facility for each member profile.