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#WOMENINFINCRIME: Conference of women financial leaders hears demands for improvement in how regulators interact with institutions

By Dan Byrne for AMLi

THE RELATIONSHIP between regulators and institutions is one of the biggest challenges facing the fight against dirty money, according to a panel of women FinCrime experts.  

The public-private interaction took centre stage at Wednesday’s Women Leading the Fight Against Financial Crime webinar – organised by Napier. The conversation brought together compliance and regulatory professionals from across the globe to discuss challenges in FinCrime.  

“Let’s face it, we are not doing very well if 1% of criminal activities are spotted and reported,” said Mariola Marzouk – Head of Product at Napier, an AI-based compliance platform. 

Her comments came amid criticism that despite the advances in tech-based AML solutions, regulators were slow to realise the value.  

“There is a challenge in dealing with regulators,” she said. “They should be far more open to what tech can provide. They need to enable regtechs to step outside their boundaries.” 

This lack of engagement was also noticed by compliance expert Oonagh van den Berg – founder and managing director of global compliance officer community Raw Compliance.  

She dubbed many regulators’ actions a ‘one size fits all’ approach, echoing a common claim amongst AML professionals that authorities expect any business in the industry – regardless of size or structure – to keep to a prescribed formula.   

“When granting licences to fintechs, the regulators need to look at how they have built their infrastructural support, and how they have developed their AML frameworks,” van den Berg explained. 

She spoke of her wish for regulators to “hand-hold” institutions – working with them as much as possible rather than simply “jumping on the enforcement bandwagon,” when issues arise.  

The Monetary Authority of Singapore was a good example of a body that hand-held institutions through their AML structures, she said, calling for more across the world to follow this example.  

From the prosecutorial perspective, Attorney Advisor at the US Department of Justice Karyn Kenny said that the issue was primarily about “what’s possible versus what’s doable.” 

She described her field as responsible for maintaining a functioning economic sector, and upholding laws.  

“It’s to keep a balance,” she explained. “You have to protect those who are playing by the rules. There are always those who don’t, and that’s where we come in. It’s about accountability, because without accountability, you have bad actors.” 

Nevertheless, Kenny did acknowledge that the public-private divide was not helping, and that more needed to be done to overcome the “silos” that different AML players can find themselves in.   

Meanwhile, van den Berg also singled out a ‘culture of compliance’ as something which needs to be gotten right from the start in any institution.  

“It’s not just about talking the talk, it’s about investments,” she said. “To develop the right culture of compliance, it is imperative that you have that tone from the top. It will dictate and set how the compliance framework will work.” 

She acknowledged that for some institutions, costs in this area can spiral – taking huge chunks from an institution’s budget. Being practical about how each institution implements control was a key way around this, she stressed.

“Otherwise, it doesn’t matter how much money you spend, you’re still dead in the water.” 

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