The Financial Institutions' nowadays are faced with the technical, operational and human capital management costs of administering many required programs for Customer Identification (CIP), Know Your Customer (KYC),Customer Due Diligence and Expanded Due Diligence (CDD & EDD), Watch List Searching and Reporting (OFAC), Cash Transaction Monitoring and Reporting (CTR), Suspicious Activity Reporting (SAR), Transaction Monitoring (TM), and Case Management (CM). The complexity of these programs and their costs has been cited often as a cause for the consolidation of banks to achieve relief through the economy of scale.
Individuals who can provide experience across these requirements are difficult to find and to keep. Those who can span the entire spread of compliance requirements are rare and expensive. The problem of finding good employees, motivating them and retaining them for long periods needs to be addressed with a better understanding of the potential savings that can be achieved.
It’s easy to see that the above factors create a demanding and critical scenario for each FI.
1. How significant is the FI’s risk for BSA/AML compliance and/or fraud losses?
2. How much of the overall enterprise’s process has been integrated in such a way that automation reduces the dependency on an individual, local knowledge and experience?
3. What is the nature of the local employment environment – are qualified BSA/AML experts available, is there an opportunity to hire and “home grow” experts internally?
4. Are available salary levels consistent with those expected by certified BSA/AML and fraud analysts (e.g., ACAMS, IAFCI, ACFCS); or is it reasonable to hire un-certified workers?
Regardless of the answers to these and other questions, the FI human capital management process needs to provide the ability to acquire, train, compensate, motivate and retain the employees needed to operate a satisfactory BSA/AML program.
Each of these functions may be unique for these employees – and they are likely to be unique to each individual FI due to the variations in risks and existing capabilities.
It is critical for tier 2 and 3 banks and credit unions to know where to look for qualified and experienced financial crimes candidates. The recruiting and onboarding process, including pre-employment screening, eligibility verification, interviews, and assignment management need to be designed toward the specific risks and vulnerabilities of the FIs compliance process.
BIO: Bob Cofod is an AML expert with specialization in business intelligence. He is also president at ClayHR and in his spare time, mentors young entrepreneurs and helps them overcome their challenges!