Bringing outsiders into your compliance team: Four considerations

Mar 12, 2020

Hiring third party investigators to bolster your AML and Compliance team? Here’s four things to consider before you pick up the phone.

Money Laundering investigators are in high demand: banks and other financial institutions have spent almost two decades hiring more and more of them. Add to this a complex working environment that the well-documented issues of detection inefficacy, rising alert volumes and a shortage of candidates skilled up to work with the Banking Secrecy Act and other regulation, and many banks are faced with a recruiting crunch.

One answer is to bring in third party investigators – but it almost immediately raises another issue: can you get them working productively with the AML systems you’re running?

Based on conversations I’ve had with senior compliance officials at several North American banks, as well as our own institutional experience, here are four things any institution should consider before it calls in third party investigator contractors:

  1. Establish roles and permissions for each type of third party user. What will these users be able to do and not do? Can they see information on Suspicious Activity Reports (SARs) and Suspicious Transaction Reports (STRs), or do they just need to work alerts and cases? Working this out ahead of time will make it easy to demonstrate to internal and external auditors what levels each user has – and that goes for full time employees, too.
  2. Ensure the third party users have their own group identifiers so a reporting analyst can run reports on their productivity reports to demonstrate the value and efficiency of the third party user. These groups of users should be the basis for reporting and ensuring that service level agreements are being met.
  3. Understand and document where the third party user will sit in the workflow. Is there a clear escalation path defined for third party users either to a senior third party user or directly to the bank supervisors?
  4. For best efficiency, it should be the goal that third party investigators do as much work in the financial crime solution as possible without leaving the system. Getting these third party users access to various banking systems creates risks and increases inefficiency. The more relevant data that can be ingested, used in detection, and then working alerts and cases is critical to the success of the team.

Third party users and staff augmentation firms are filling a growing need on many AML teams. Ensuring your financial crime solution is ready for external users will be a key investment to make to ensure success. Identifying your institution’s ability to tackle these four key tasks will help prepare for the future. (Editor's Note: The article was written by Richard Graham; original article here. Reposted with permission.)

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