THE IMPORTANCE OF ISSUE PERCEPTION IN AML COMPLIANCE

There's a reason that I believe lawyers make outstanding compliance officers: in law school, rather than simply memorizing black-letter law, the case book method is taught. This means that it is up to the law student to read the cases assigned, extract the issues, then to the law cited in the opinion as the grounds for the ruling. Identifying the central issues that all the cases present trains the student in issue perception, the learned ability to find the issues, and apply them to the law.

Compliance officers, when performing due diligence upon a new bank customer, or engaging in transaction monitoring, must also look at the facts that their system has extracted for them, and determine precisely what their target is attempting to do. Is it legitimate, or does it look like some sort of financial crime, especially money laundering? It's that issue perception ability which answers that question.

The legal profession, like the compliance world, also now has gone to artificial intelligence platforms, to speed up and expand their research, which they then subject to critical examination. we note that the company involved in presenting legal authorities to attorneys since the 1800s has now moved in AI, but interestingly enough supplements that research advance with staff attorneys to interpret those AL/ML results. Compliance officers basically do the same thing: take the results and formulate a conclusion about the client's activities, using their skills and experience. It is the compliance field's version of issue perception.

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