HOLLYWOOD, Fla. — More than 2,000 financial services professionals from 15 sectors, both public and private, descended upon the 23rd Annual Association of Certified Anti-Money Laundering Specialists (ACAMS) AML & Financial Crime conference, last week for their own Spring Break, of sorts — three days learning from and networking with experts, colleagues, regulators, and law enforcement officers.
While the days were long, the sessions were quite informative, spanning everything from cryptocurrency and Fintech to sanctions updates on known terrorist havens such as North Korea and Iran.
Regulatory Roundtable: A Takeaway
The first day kicked off with a timely roundtable discussion from top regulators at the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller (OCC), the U.S. Securities and Exchange Commission (SEC), Financial Crimes Enforcement Network (FinCen), and the Federal Reserve.
The session focused on:
- Detailing recent domestic and global regulatory changes to understand new requirements for addressing money laundering, sanctions and other financial crimes;
- Taking recent enforcement and other regulatory actions as one method of enhancing a financial institution’s ability to meet any evolving compliance responsibilities; and
- Assessing anti-money laundering (AML), related trends, and issues as seen by examiners to determine any emerging compliance challenges.
John Bryne, President of Condor Consulting, moderated the discussion which included panelists Lisa D. Arquette, Associate Director in the FDIC’s Division of Risk Management Supervision; Spencer Doak, NBE, Director for BSA/AML Policy at the OCC; Lourdes Gonzalez, Assistant Chief Counsel – Sales Practices in the SEC’s Division of Trading and Markets; Andrea Sharrin, Associate Director in the Policy Division of FinCEN; and Suzanne Williams, Deputy Associate Director for Corporate Governance Supervision and Regulation Division at the Federal Reserve.
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Key Takeaways from the Regulators
The hour went quickly with regulators touching on a number of key topics. Some of the overarching themes included:
Cryptocurrency — Digital ledgers cannot be ignored. The SEC’s Gonzalez reminded the audience that cryptocurrency developments are occurring rapidly and don’t seem to be slowing down. What does that mean for the regulators? They aren’t shying away from the topic — being proactive is seen as the key.
“Even firms that currently have no touch to cryptocurrencies are likely to be asked by customers to wire or receive funds from currency houses,” Gonzalez said. “You should think that through from a compliance perspective before it happens, and your AML policies and procedures should be updated accordingly.”
Managing Risk —When it comes managing risk, the OCC’s Spencer told the audience that banks must be proactive in managing risk but that doesn’t mean it is a game of “gotcha.” Simply put, while banks are expected to properly manage risk related to the Bank Secrecy Act, AML and countering the financing of terrorism (CFT), “they are not expected to manage to zero risk,” Spencer said.
In relation to the upcoming enforcement of the Customer Due Diligence (CDD) Requirements that are going into effect on May 11, regulators don’t expect to walk into banks the next day and begin full enforcement actions. This will come with time, but in the immediate future, regulators will use a level-handed approach to enforcement — not guns blazing.
Technology Will Not Replace You — All regulators agreed that we are in an exciting time of technological advancement in the banking industry. Regulators have an increased awareness of technology; and they recognize that innovation and artificial intelligence can help with information sharing. While such innovation is welcomed, the FDIC’s Arquette assured the crowd that “you are not replaceable,” reminding them that human beings are the ones who drive processes and relationships. “SARs [Suspicious Activity Reports] can’t be written without you,” she added.
Collaboration is Key — Finally, FinCEN’sSharrin confirmed that we are all in this together, and that regulators want to work in tandem with the industry. “There are lots of opportunities to be collaborative and enhance value,” she observed.
You can learn more about how public entities such as law enforcement and regulators can work with private entities to fighting money laundering. ACAMS and Thomson Reuters are coming to Charlotte on April 24 and to Washington, D.C., on April 26 where our speakers will focus on how the partnerships between law enforcement and the financial industry are critical to combating financing of criminal activity and terrorism. Register now!