The Anti-money laundering act is a wakeup call for compliance officers to modernize AML programs

By Tobias Schweiger

Earlier this year, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a $390 million penalty against Capital One for “willful” anti-money-laundering (AML) failures that happened during a period between 2008-2014. For compliance operators in the space, the action was a strong signal of rigorous enforcement, and perhaps a sign of increased pressures to come.

Looking at the U.S. market, aside from recent enforcement actions, imminent regulatory changes are paving the way for this increased interest in AML compliance. On the very first day of 2021, the U.S. Senate passed legislation that included the Anti-Money Laundering Act (AML Act) of 2020, which marked the most significant changes to the Bank Secrecy Act (BSA) since it was originally passed in 1970. The AML Act itself is comprised of 56 sections in five titles and runs 86 pages long. Within those pages is a slew of new provisions that address a multitude of issues related to AML that several parties – including legislators, regulators, and the public and private sectors – have been working to address for years.

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U.S. regulators have made it very clear that AML is a priority for the foreseeable future, renewing calls for firms to reinforce their AML compliance to stay ahead of curve. For executives, there is a need to rationalize and optimize their spending in this area as new technology can. For financial institutions, a desire to avoid a damaged reputation for failed AML compliance is imperative. The good news is that with advancements in technology, particularly in the field of AI and machine learning, these decisions are becoming less burdensome from an operations perspective, and are proving to be worth the investment.

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