The Top 5 ACFCS Stories of 2021: From regtech ruminations to historic fincrime regulations, readers seek knowledge on compliance effectiveness, even as countries broadly struggle to practice prevention

The Skinny:

  • In this special fincrime compliance industry lookback, we review the most in-demand and widely read ACFCS stories of 2021, cognizant that the trends, enforcement actions and regulatory updates will inform and underpin the New Year.
  • So what were compliance officers, investigators, regulators and other sector professionals reading? Not surprisingly, they wanted to know more about the incredible promise of technology to better align with stronger regulations and improve programs and effectiveness – a burgeoning field called “regtech.”
  • As well, readers wanted both more granularity on things like the historic U.S. Anti-Money Laundering Act (AMLA), and national countercrime priorities – like crypto laundering, cyberfrauds and grand corruption – along with a broader, deeper understanding of money laundering gaps and vulnerabilities at the country level. 

By Brian Monroe
bmonroe@acfcs.org
December 23, 2021 

In this special fincrime compliance industry lookback, we analyze, scrutinize and revisit the most in-demand and widely read ACFCS stories of 2021, cognizant that the trends, enforcement actions and regulatory updates will inform and underpin the New Year.

So what were compliance officers, investigators, regulators and other sector professionals reading on www.acfcs.org? Plenty.

Not surprisingly, they wanted to know more about the incredible promise of technology, with clarion buzzwords like artificial intelligence, automation and machine learning, for example, to better align with stronger regulations and improve programs and effectiveness – a burgeoning field called “regtech.”

As well, readers wanted both more granularity on things like the historic U.S. Anti-Money Laundering Act (AMLA), and national countercrime priorities – like crypto laundering, cyberfrauds and grand corruption along with a broader, deeper understanding of money laundering gaps and vulnerabilities at the country level.

Overall, even as jurisdictions grappled with rising challenges tied to the ongoing coronavirus pandemic – investigators not able to visit foreign allies as easily, regulators not able to engage in onsite exams at all and compliance teams juggling alerts while disconnecting and working from home – 2021 will be remembered for concrete, tangible progress to move the sector forward.

Here are some snapshots to the biggest ACFCS stories of the year, chosen by readers. Enjoy! 

Special contributor report: Top 5 Emerging Trends for AML Compliance: Dawn of a New Decade 2021!

In this special contributor report, a tech-savvy thought leader takes a look ahead at what will be key financial crime program fulcrum points, regulatory focal points and how best to use technology and partnerships to achieve effectiveness.

Sujata Dasgupta is making these predictions informed by the last decade and her more than 20 years of experience in financial services, cognizant that banks in recent years have been pushed to better analyze and wield data to more efficiently manage a broad array of rising anti-money laundering (AML), fraud and sanctions risks. 

Some snapshots: Facial recognition, artificial intelligence and other analytics technologies are set to transform the more rote areas of AML and get a much more precise risk ranking for a customer – allowing teams to spend more time linking larger scale and potentially criminal interlinked threat actors.

Check out the full story here: https://www.acfcs.org/special-contributor-report-top-5-emerging-trends-for-aml-compliance-dawn-of-a-new-decade-2021/

Dasgupta also gave a preview of 2022.

Some slices: Regulators will have to work with, not against, banks, fintechs and technology vendors — and be more aligned with broader law enforcement priorities.

New tech could make sanctions screening for payments faster along with facial recognition, artificial intelligence and other analytics technologies transforming customer identification, going fully digital.

Check out the full story here: https://www.acfcs.org/special-contributor-report-regtech-in-aml-fincrime-top-5-trends-to-watch-in-2022/

In FinCEN release of AML priorities, Wolfsberg metrics of effectiveness, a glimpse of the future of financial crime compliance

The future of financial crime has “effective” compliance teams generating “highly useful” and “relevant” intelligence for investigators in focused, shifting defined “priority areas,” both broad generators of illicit income, like corruption and cyber-enabled fraud, but also attuned to the actions and reactions of international threat actor groups.

Those are just some of the key takeaways from the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) releasing the formal list of its national anti-money laundering and countering the financing of terrorism (AML/CFT) priorities, a collection of historic foils like organized criminal groups and other rising risks, like record ransomware attacks and crypto-fueled paydays.

Coinciding with and underpinning the release of FinCEN’s AML priorities, the Wolfsberg Group issued a critical missive to detail in practical, tactical steps how financial institutions can actually demonstrate effectiveness, a term in recent years bandied about with much fanfare, but little in the way of bright-line, auditable boundaries.

Check out the full story here: https://www.acfcs.org/in-fincen-release-of-aml-priorities-wolfsberg-metrics-of-effectiveness-a-glimpse-of-the-future-of-financial-crime-compliance/

 

OFAC, Fed, NYDFS penalize Mashreq bank $100 million for sanctions failures, just three years after $40 million fine for similar issues

The U.S. Treasury’s Office of Foreign Assets Control (OFAC), Federal Reserve and the New York State Department of Financial Services (NYDFS) Tuesday issued coordinated enforcement actions totaling $100 million against Dubai-based Mashreqbank for purposely omitting details on payment transactions with ties to Sudan.

The case is eerily similar to other international bank “stripping” cases that have cropped up since 2009 – there have been nearly a dozen over a little more than a decade with forfeitures and penalties of more than $12 billion, including one case alone of more than $9 billion.

Part of the message the NYDFS wants to relay to the broader international banking sector is that operations with branches in the United States had better police their correspondent networks – particularly those in riskier regions with a propinquity to destabilized, extremist and terror hotspots.

Check out the full story here: https://www.acfcs.org/ofac-fed-nydfs-penalize-mashreq-bank-100-million-for-sanctions-failures-just-three-years-after-40-million-fine-for-similar-issues/

 

Basel AML Index 2021: An ounce of prevention worth a pound of effectiveness when it comes to countering criminals, championing compliance

A global index on financial crime risks has issued its annual rankings, with the diminutive European principality of Andorra, taking the top spot, while the besieged and beleaguered Caribbean Island of Haiti, got the worst score.

But there are some nuances in the 10th Annual Edition of the Basel Anti-Money Laundering (AML) Index. Overall, the index noted that, broadly, countries are getting worse at effectively countering and preventing the trillions of dollars in illicit finance flowing around the world each year.

Why? That is chiefly due to four overarching challenges: weak or non-existent compliance rules around cryptocurrency, not preaching on prevention and foundering on effectiveness, failing to boost beneficial ownership and tackle corporate opacity and continuing to leave certain non-bank groups unbound by AML rules, like gatekeepers.

Check out the full story here: https://www.acfcs.org/basel-aml-index-2021-an-ounce-of-prevention-and-being-less-effective-on-effectiveness/

 

With reported resignation of FATF head, world’s most influential AML watchdog faces questions about independence, integrity, successes, succession

The head of the world’s top counter-crime compliance watchdog has resigned, a surprise move after he was given a three-year extension, leaving a gaping gap threatening to slow gathering global momentum to champion fincrime program effectiveness – at the country and institution levels. 

The upcoming departure of the widely known, deeply respected and imminently influential David Lewis has also opened up the Paris-based Financial Action Task Force (FATF) to a rare cacophony of criticism with the publication of a testy letter sent to staff, according to media reports.

But the show must go on and finding a new star to fill the void will be challenging. Whoever FATF chooses after Lewis will be under immense pressure and scrutiny to balance the political power wielded by members, keeping large jurisdictions on their toes, without losing site of smaller, riskier regions that could become gateways for illicit financial flows.

Check out the full story here: https://www.acfcs.org/with-reported-resignation-of-fatf-head-worlds-most-influential-aml-watchdog-faces-questions-about-independence-integrity-successes-succession/