More than ever before, financial institutions are challenged to meet financial crimes compliance obligations in a more cost-effective and agile way. As the economic environment promises continued uncertainty and increased competition—including from emerging and innovative FinTech firms—institutions must become more strategic and intentional in how they manage risk. Many financial institutions, are addressing this by integrating their existing anti-money laundering (AML), sanctions, fraud, surveillance and anti-bribery and corruption (ABC) compliance programs under a unified financial crimes umbrella. However this journey, once undertaken, must be well-designed and carefully managed.
Over the past few years, financial institutions have been confronted with a host of financial crimes risks and scandals ranging from manipulations of LIBOR rates to rogue trading,money laundering, sanctions, cybercrimes human trafficking,fraud, bribery and corruption, and market manipulations (to name a few).
Regulators increasingly expect Chief Compliance Officers (CCOs) to achieve greater consistency in their approach to managing diverse financial crimes risks across the enterprise; establish greater coordination and collaboration; achieve more robust information sharing; further integrate technology enabling an enterprise-wide view of their risks; and consider how predictive data analytics can be used to enhance their risk-based monitoring. In addition to these regulatory pressures, many financial institutions are being challenged by new entrants to the marketplace in addition to their traditional competitors, all while operating in a lower profit margin environment. This is compelling some institutions to assess whether their approach to financial crimes risk can be more agile and dynamic, even as they further cut costs to realize greater compliance value and competitive innovation.
This publication will discuss in more detail some of the regulatory drivers that are encouraging CCOs to integratetheir approach to managing financial crimes risk; the governance benefits of further structural integration; and a road map for considering how to execute and embark onthis journey.
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