In “Carrot or Stick? How to Incentivise Compliance” (Money Laundering Bulletin, 27 February 2025), Alex Levitov comments on whether compliance payback models would be more successful than the threat of enforcement in getting financial institutions to comply with anti-money laundering/counter financing of terror (AML/CFT) regulations and increased sanctions. Alex notes that some institutions have tried tying staff compensation to compliance outcomes: “We have seen financial institutions begin to tie compensation for relationship managers and other business personnel to compliance and risk management goals, underscoring the message that the business owns the risk of customer relationships and serves as the first line of defense against illicit activity. Many in the industry have also formalized whistleblower protections, which encourage the detection and reporting of noncompliance.”
Read the Money Laundering Bulletin article. (Subscription may be required.)