ACAMS Update John J. Byrne, Esq., CAMS Executive Vice President February 5, 2016 1 1
ACAMS Membership 2
ACAMS Certified Members 3
Chapter Membership *Chapters over 50 members 4
Advanced Certification Certifying excellence in the AML/CTF and financial crime prevention community. NEXT CLASS COMING MAY 2016! WHO SHOULD ATTEND? CAMS-FCI Senior Investigators Law Enforcement Compliance Officers FIU Managers Legal Counsel CAMS-Audit Internal/External Auditors Consultants Regulators Compliance Officers Risk Managers Advanced Certification White Papers are available for download! Go to www.acams.org -> Certification -> Advanced Certification 5
CAMS Virtual Classroom The CAMS Virtual Classroom is a live web-based study course, aimed at providing candidates of the Certified Anti-Money Laundering Specialist (CAMS) program additional guided instruction and help with retaining and reinforcing key concepts covered in the main CAMS examination study materials. Included in the course: Six easy-to-follow 2-hour virtual classes over a six week period Homework assignments designed to enhance comprehension of key AML concepts Practice questions to assess understanding of the material and raise testtaking confidence For upcoming class schedules please go to www.acams.org -> Certification Tab -> CAMS Virtual Classroom 6
CAMS 6 th Edition Exam ACAMS is in the process of developing the 6 th version of the CAMS Examination. The 6 th Edition Exam is scheduled for release in Q4 2016. The Q4 2016 release will only be in English. However, we plan to translate the exam into: Spanish Arabic Chinese Japanese French German Portuguese Stay tuned for more information regarding the go-live date of the CAMS 6 th Edition Examination! 7
ACAMS Today A. ACAMS Today mission: 1. The award-winning quarterly publication dedicated to keeping ACAMS members up-to-date on financial crime detection and prevention. Written by and for our members! B. Current edition highlights: 1. December 2015-February 2016 (Award Winners edition) a. Interview featuring the Honorable Frank Whitney, Chief U.S. District Judge for the Western District of North Carolina b. Cover articles: Winners Gallery, featuring the 2015 ACAMS award winners Dear Board, by Amy Wotapka and Lauren Kohr C. Upcoming edition and article submission process: 1. March-May 2016 2. Send article submissions to editor@acams.org 8
Award-Winning ACAMS Today A. ACAMS Today winner of 19 awards in 2015 B. 2015 award-winning editions 9
ACAMS AML Professional of the Month A. Nomination process for AML professionals from the public or private sectors 1. Form is accessible on ACAMSToday.org. 2. Submission details: a. Nominator name and last name b. Nominator email c. Nominee name and last name d. Nominee title e. Nominee email f. Nominee photo (optional) g. In 250 words or less, please state why your nominee should be considered for ACAMS AML Professional of the Month 10
Visit ACAMS.org to learn more about the event and register today! 11
Risk Assessment Our Vision To offer financial institutions worldwide a standardized means of measuring, understanding and explaining their AML risks 12
Risk Assessment Product Benefits Offers a Methodology Built through Industry/Membership Input and Consensus Adapts over time to respond to the highest of global standards, institutional guidance, and changing regulatory obligations Helps You Mitigate Risk by Filling in the Gaps in Your Institution s Internal Controls Maximizes Efficiencies with Automated, Standardized Scoring 13
Risk Assessment Product Features Comprehensive Global Risk Assessments by Enterprise or Business Unit Presentation Ready Summaries and Reports allows you to Communicate Clearly and Effectively to Examiners, Supervisors, and other Stakeholders Aggregate Reporting offers Peer Assessment Benchmarking & Builds a Framework for Future Industry Standards 14
AML Foundations A 4-hour stepping stone for entry-level employees not yet ready for CAMS, and for business line staff, who need solid AML training now so they can add more value on the job today. To learn more: acams.org/aml-foundations 15
Sanctions Compliance Just the right depth for staff at all levels to apply to your specific compliance program. 4 parts, 4 hours, completed in 4 weeks All online blend of live and self-paced work Written and presented by sanctions experts working around the world Passing the online assessment earns a certificate To learn more: acams.org/sanctions-compliance-training 16
ACAMS / AGA Webinar Join ACAMS on Monday, February 29 for a webinar to discuss the recent findings of the The AGA Report on Industry Commitment to AML Compliance and Challenges 17
John J. Byrne, Esq., CAMS Executive Vice President Email: jbyrne@acams.org @jbacams2011! 18 18
Risk Assessing your Risk Assessment: Do you have what it takes? Challenges & Solutions to a Pressing Issue
Overview & Roadmap Increasing regulatory scrutiny. Assessments have gone beyond the basics: Products, Services, Lines of Business (LOBs), Customers, Entities, Geographies. 1. Focus on the above items that present unique challenges and increased exposures It s your opportunity to articulate your understanding of the impact of these unique activities, the risk and the controls. Don t leave them out of your risk assessment because they present elevated risk. That won t end well if the examiner stumbles across the higher-risk item during the exam and it s not addressed in the risk assessment.
Overview & Roadmap 2. Think quantitatively. Include meaningful data. # of accounts, # transactions, increases, decreases, by product, service, geography, and customer type. It s a rubix cube. Focus on the risk scoring methodology for each factor. Also on the overall scoring methodology of what equates to Low, Moderate, and High (or whatever scoring method you use.) This also includes the risk-weighting methodology, which may be new to some of our smaller community banks in attendance. Show of hands. How many attendees have risk assessments that use riskweighting? Risk-weighting helps prevent the overall risk rating from being skewed by numerous low-risk items averaging out an extremely high-risk item.
Overview & Roadmap 3. Reporting: Discuss These Elements Methodology used Institution s AML risk appetite Quantity of Risk Controls in Place Residual Risk Direction of Risk From prior year to current Direction of risk over next 12 months and why. Always present both a narrative report and a supporting quantitative grid.
Challenges. Practical Challenges Process Manual in nature Resource burden Methodology creation and testing time constraints Management involvement (or lack thereof) Data (the constant challenge) Availability Completeness Disparate information sources Reliance on line of business ( LOB ) surveys Poorly worded questions Incomplete responses Uncooperative LOB s
Challenges. Business Challenges Creating an Effective Risk Assessment Document Balancing the qualitative versus the quantitative Identifying true mitigating controls Creating narratives that correspond to results Avoiding over reliance on manual override functions Supporting conclusions with proof, not anecdote Including a reasonable and actionable GAP Assessment that identifies opportunities for enhancement
Challenges. Other Challenges I have a risk assessment so now what? Dealing with inconsistent regulatory expectations and guidance Garnering management support and buy-in
Methodology Overview The Risk Assessment should be supported by sufficient detailed analysis to assess individual components of: A Inherent Risks Assess based on likelihood and potential impact High, Medium and Low grading or a numerical (1 to 5) grading for the risks. B Mitigating Controls Assess to identify the extent to which the risks are mitigated. The controls may be graded based on strength (Strong, Adequate and Inadequate) or a numerical score similar to the risk factors scoring. C Residual Risks Risks not mitigated or inadequately mitigated by existing controls form the Residual Risks. Resource allocation focused on key unmitigated risks. 8 Telavance, Inc. www.telavance.com
Risk Assessment Components Prior audit & exam findings The AML Risk Assessment process involves a thorough review of: Organization structure, compliance culture Products and services Policies and procedures Geographies Customer base Telavance, Inc. www.telavance.com
Addressing the Data Challenge To gain this understanding, questionnaires can be used in conjunction with interviews with business heads, compliance, information technology and internal audit groups. The assessment factors should be supported by in depth analysis of historical data that will include: Segmenting the customers by type (individuals, businesses) Businesses can be further segmented by entity type (banks, corporates, mutual funds) and industry (financial services, consumer durables, F&B etc.). The customer country (country of citizenship, country of incorporation etc.) and geographies they operate in. Business volumes by product type (checking, securities, trade finance, etc.) and by transaction types (wires, cash etc.) Transaction volumes and values by geography, especially if higher risk jurisdictions are involved. Telavance, Inc. www.telavance.com
Factors to consider Risk Assessment should Lead to improvement in monitoring controls Be used as a tool to drive the Compliance program of a financial institution. Identify residual risks that should be converted into corrective action and remediation plans that are used to improve the control environment. Be sensitive to significant changes Organization structure Customer base, products and geographies Mergers/ Acquisitions New regulatory guidance Regulatory findings or overall controls weakness Increase in SARs, OFAC hits etc. Telavance, Inc. www.telavance.com
Challenges and Possible Solutions
The Evolution of AML Executive Perspective: Views & Expectations of the BSA Officer February 5, 2016
The Evolution of AML BSA Officer Internal Controls Independent Testing Training February 5, 2016
The Evolution of AML Personal Liability of the BSA Officer How has it changed the operating model Centralization/decentralization of decision making Communication with other business lines February 5, 2016
The Evolution of AML Regulatory Expectations February 5, 2016
The Evolution of AML Employee Training Keeping the message fresh the boy that cried wolf Right fitting the medium for all levels of the organization February 5, 2016
The Evolution of AML Use of Analytics & Monitoring Increasing Coverage in Depth and Width Advancement of Models vs Rules Ad-hoc discovery SWAT, Red Teams. February 5, 2016