On the latest episode of the Integrity Matters podcast, host Tom Fox sits down with Koby Bambilia, K2 Integrity Managing Director, to discuss anti-money laundering (AML) trends to watch in 2022.

Listen to Part I on Fraud Trends with Olivia Allison, K2 Integrity Senior Managing Director.

AMLA to Take Center Stage

In 2022, Treasury will be focused on the priorities established as part of its national security strategy in the Anti-Money Laundering Act (AMLA) of 2020. Regulators will be expecting financial institutions to step up efforts in:

  • Cybercrime and virtual currencies,
  • Foreign and domestic terrorist financing,
  • Criminal organizations, particularly those connected to drug and human trafficking,
  • Corruption and fraud, and
  • Proliferation financing.

While this is a long list of initiatives, their common denominator is combating money laundering. At the core of each is a system that allows ill-gotten gains to work their way into the global economy. Financial institutions need to establish a strong framework to assess risk when onboarding clients, monitoring new products and services, and engaging with countries of operations.

Koby also reveals how the Corporate Transparency Act (CTA) will affect banks and financial institutions. Key to the CTA is developing a national registry of beneficial ownership information which will augment the customer due diligence process.

Changes in Virtual Risk

In no small part due to the pandemic, cybercrime, and ransomware attacks specifically, skyrocketed in 2021. And there’s no sign that they’re slowing down. Recent incidents like the Colonial Pipeline shut down last spring prove how critical strong reporting systems and enhanced cybersecurity measures are going to be in the coming year.

To prepare for the threats of tomorrow, banks need to be able to provide thorough and accurate reporting about the transactions passing through their systems, particularly those involving virtual assets. Meet the demands of the updated BSA/AML/Sanctions and stay ahead of ongoing rulemaking with:

  • A robust program with policies and procedures that always address the most recent regulations,
  • A designated, knowledgeable individual responsible for the day-to-day compliance function who also has the support of senior management and the board of directors,
  • Update current system of controls and test that they can effectively detect and identify
  • An effective internal audit function that’s updated to support the volume of work,
  • Comprehensive employee training programs that provide accurate, up-to-date tools and knowledge.

Please remember, no regulator will accept “lack of resources” as an excuse for compliance violations. It is always in the best interest of financial institutions to consult with trusted compliance partners to discuss ways of setting their organizations up for success.