How employee engagement enhances AML compliance program
How employee engagement enhances AML compliance program
Compliance with AML rules is mandatory for Financial Institutions, Virtual Asset Service Providers (VASPs) and some Designated Non-Financial Businesses and Professions (DNFBPs). Achieving 100% compliance with the regulatory requirement is possible when your employees are with you. When their goals are the same as the business goals.
Employee engagement in AML compliance is critical to safeguard the business from being exploited by financial criminals.
Let’s look at how employee engagement helps in AML compliance.
What is the significance of AML compliance?
Money laundering and predicate offences are a threat to the global financial system. Efforts to curb these menaces are on, but criminals find new ways to launder money. Fighting these crimes with focused anti-money laundering efforts from all directions and sectors is possible.
International authorities like FATF and others have defined guidelines and best practices for countries to adopt. National regulators have implemented strict AML regulations aligning with these guidelines. These rules include several obligations for the reporting entities, such as:
- Designing and executing an AML policy, procedures, and controls
- Conducting AML business risk assessments
- Carrying out KYC and Customer Due Diligence
- Transaction monitoring to identify suspicious transactions
- Frequent AML health checks
- Filing reports and submitting documents as the relevant supervisory authority requires
Compliance with the above AML compliance requirements is essential due to the following reasons:
- Complying with AML regulations saves you from the fines and penalties of regulatory authorities owing to non-compliance or negligence.
- AML requirements call for monitoring your customers and transactions, helping you identify suspicious activities and safeguard your business.
- AML compliance helps you stay vigilant of financial crimes, reducing your future costs of money spent on recovering from such crimes.
- When you comply with AML regulations, your customers trust you more with their transactions, improving brand reputation and shareholder value. It also means brand security, business continuity, and long-term success.
- AML compliance builds a safer, more secure, and more stable financial system, contributing to the country’s economic development.
- AML provisions help countries tackle different types of financial crimes using KYC and due diligence measures, protecting the vulnerable sections of society from their impact.
What is employee engagement?
Employee engagement means the connection employees feel toward their company, teams, and work. Employees are engaged when:
- They have a deep, long-term connection with the company.
- They are productive and make extra effort for the company or job.
- They connect to the company’s well-being and work toward its goals.
- They commit to the company’s mission and are happy to contribute to its achievement.
- They know that the company values their work, and so they do more than what’s expected from them.
- They are eager to help in any possible way to further the company’s goals.
Engaged employees contribute more to generating better business outcomes by aligning with the company’s objectives. Employees support the company’s goals of reducing the threats of money laundering, terrorism financing, and other financial crimes. Supporting the execution of provisions helps companies fulfil AML regulations.
Companies cannot just engage employees by increasing their well-being or keeping them happy with facilities, pay, and recognition. They need to do more. They must encourage employees’ professional development and support them in their individual goals.
To engage employees, companies must:
- Inspire them by sharing vision, mission, and goals,
- Create a positive attitude and work culture at the top levels to inspire the lower levels to imbibe the same,
- Have an effective onboarding process to set the employees up for growth in their roles,
- Offer professional development opportunities, including mentorship programs,
- Appreciate employees’ efforts, acknowledge their contribution, and offer incentives based on performance,
- Outside-work plans and events create connections between employees,
How does employee engagement help in AML compliance?
The various ways how employee engagement leads to AML compliance include:
Engaged employees take active participation in AML training and awareness programs
Before implementing AML compliance programs, companies create awareness of AML and its importance. They need to create such awareness on:
- Money laundering and other financial crimes
- How AML regulations help combat these crimes
- How to conduct KYC and due diligence
- What are suspicious transactions, and how to identify them
- How to do continuous monitoring of transactions
- How to fulfil national AML regulations
- In what ways can technology help in AML and how to operate it
- Making and maintaining records for AML compliance
Along with awareness, companies also train employees on these aspects to ease AML compliance.
Engaged employees feel more motivated to contribute to AML compliance and take an active part in training programs. They understand the long-term, global impact of AML efforts and sincerely support them. With these efforts, you can reduce money laundering and other crime risks.
Engaged employees align with AML goals and objectives
Engaged employees stay aligned with the company’s vision, mission, and values. That means they also align with the AML goals. Such alignment inspires employees and motivates them to do better at their jobs.
Engaged employees take ownership of their work and contribute to AML measures. They consider their moral duty to take every possible step to save the company from threats of financial crimes. Thus, their role in maintaining compliance increases. Employees are more committed to identifying and reporting suspicious activities.
Engaged employees take a more proactive approach
Engaged employees are more favourable toward doing more for the company. They want to do everything possible to save the company’s reputation and avoid fines and penalties. So, they stay committed to making the company compliant with applicable laws.
This is how they also contribute to AML compliance. They spend more time, energy, and effort paying attention to every suspicious transaction. They also ensure that the KYC of customers is proper and up-to-date. They record all details of every transaction to check their relation to illicit activities. Thus, they protect the company against money laundering.
Engaged employees believe in a culture of compliance
To follow all AML requirements, you must create a culture of compliance in your business. All employees must be positive toward achieving AML compliance and contribute effectively. Such positive attitudes and cultures come from the top to lower levels.
Since engaged employees understand the importance of compliance, they can help to create this culture. They can ensure that their colleagues also believe in achieving AML compliance.
Engaged employees detect AML compliance loopholes early
Since engaged employees commit to the company’s beliefs, they are more aligned with the AML compliance process and are keenly interested in its progress.
That is why they are also aware when something is going wrong. They know when a process is not full-proof, someone is not performing their job diligently, or a decision needs to be changed. Thus, you can detect loopholes in AML compliance processes easily.
What are employee engagement strategies to help AML compliance?
Engaged employees aligned to create AML regulations and an internal AML compliance program. They help prevent and mitigate money laundering and other financial crimes. They understand that money laundering is a significant threat and try to stay compliant at every step.
But you must use suitable initiatives to keep them engaged. Strategies you can use for employee engagement include:
- Create a culture of compliance across the business.
- Promote open communication between all employees to ensure faster reporting of suspicious transactions.
- Encourage collaboration between teams and departments to understand AML better and contribute better.
- Make the employees responsible for AML activities and tasks and measure their performance on these tasks.
- Provide incentives to employees performing their AML duties diligently and achieving measurable outcomes.
- Inspire and motivate them by sharing the international AML goals, national focus on AML compliance, and company-wide efforts to reduce money laundering risks.
- Train them on the necessary AML responsibilities and AML software to perform their duties better and faster.
- Before training them on achieving AML compliance, explain the significance of AML compliance for the company, country, and world.
- Show the employees the impact of the company’s AML measures on the outcomes – reduced risks, lesser suspicious transactions, more satisfied customers, etc.
All these efforts can increase employee engagement and contribute to AML compliance.
What is the role of AML UAE in AML compliance?
AML UAE is a distinguished provider of AML consulting services to clients in the UAE. We have redefined the quality of AML services in the market with end-to-end AML consulting. You get customized AML compliance services based on your business needs.
We help clients build a healthy culture of compliance in their business processes. We help create AML policies and impart AML training to the employees to perform their AML responsibilities. We conduct AML business risk assessment to check your money laundering risk exposure.
Our AML consultants’ expertise in KYC and Customer Due Diligence processes enhances your AML compliance efforts and manages the risks. We conduct regular AML health checks of your business to improvise your AML compliance program and prevent money laundering cases. We help you at every step of your AML journey to make it obstacle-free.
Stand apart from the pack by achieving complete AML compliance with AML UAE’s services.
Call for a consultation.
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About the Author
Pathik Shah
FCA, CAMS, CISA, CS, DISA (ICAI), FAFP (ICAI)
Pathik is a Chartered Accountant with more than 25 years of experience in compliance management, Anti-Money Laundering, tax consultancy, risk management, accounting, system audits, IT consultancy, and digital marketing.
He has extensive knowledge of local and international Anti-Money Laundering rules and regulations. He helps companies with end-to-end AML compliance services, from understanding the AML business-specific risk to implementing the robust AML Compliance framework.