Assessing Your Money Laundering Risk with Jennifer McEntire - a podcast by Thomas Fox

How can companies comply and keep up with the ever-evolving anti-money-laundering rules and regulations? Today we welcome Jennifer McEntire, the director of Financial Crime Compliance Strategy at LexisNexis Risk Solutions, where they combine big data and use advanced technology and analytics to help customers comply with regulations, evaluate and predict risk, and enhance their operational efficiency. Today, Jen and I are talking about how this can apply to non-financial service corporations, and the four key findings of their recently released report. How can commercial companies begin to assess their money laundering risk?Look at your money laundering risk instead of your anti-money-laundering compliance risk. Check your policies on payments, invoicing, and refunds, and ask if you can be used as a vehicle for money laundering. If you’re a company that sells high-value items, do you have controls in place that require refunds to go directly to the person who purchased in the first place or can payment be directed elsewhere?Look at your sanctions risk, then your anti-bribery and corruption risk. Then ask: What controls do I have? What gaps exist? How can I close those gaps? Look at your business from a different lens: money laundering, watch list screening, sanction screening, and anti-bribery and corruption.Use the data you have on your customers to get to know them better and perform due diligence. Who are they? What is the expected activity for that customer? What kind of transactions are normal for them? What geographic locations do they do business in? What kind of good data can you get? Then do regular audits to look for anomalies and irregularities.Your compliance professionals should communicate what the risks of non-compliance are. Compliance can sit with different silos (sometimes with finance, sometimes with operations), so you need a willingness to communicate better.How can companies keep up with ever-changing sanctions?You need to do your research to stay up to date: read the news, attend conference sessions, webinars, and listen to podcasts like this one.Make sure you pick a compliance vendor with roles like LexisNexis Risk Solutions: subject matter experts, people dedicated to anti-bribery and corruption, educating customers on what the regulations are.Key findings of report: The True Cost of AML Compliance: A United States Snapshot.The cost of anti-money-laundering compliance has risen significantly during the past 24 months. It’s about 25.3 billion, split down the middle between small institutions and midsize to large institutions. The findings also show that large corporations are much more efficient in approaching the compliance problem.AML compliance negatively impacts operations and business growth. Larger firms are leveraging technology in a way that’s creating efficiencies, and are able to do it faster. Smaller firms who aren’t are losing customers and have opportunity costs associated with compliance.Financial institutions that are using compliance technology and advanced data sets are able to minimize negative impacts of AML compliance requirements. Technology is your friend.A layered approach to AML technology is crucial to facilitating a more cost-effective, efficient compliance approach.Ongoing Education
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Jennifer McEntire

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