Friday, May 5, 2023


There is a danger that the windfall of relevant AML data which today's AI-powered systems is producing will not be fully understood by the current crop of frontline compliance officers. A close friend, with a lifetime of experience in the industry, recently lamented that a recent conversation he had with a supposedly competent compliance officer revealed that the individual did not understand the meaning of a slang term used by money launderers.

This basic knowledge gap is more common that not in an industry whose frontline staff members came of age long after the urgency of 9/11 drove the world's banks to give their compliance officers sufficient cultural literacy to understand the laundrymen. Today, it's all about cutting the compliance budget to please affluent shareholders, rather than effective training of the new generation of compliance officers.

The most important subject that is being ignored is teaching money laundering Tradecraft. New compliance hires, who have the certificates attesting to their knowledge of rules and regulations, but do not know how to recognize advanced techniques when presented with raw data which should result in a conclusion regarding which method laundrymen are using in their bank, is a fatal flaw. The AI data must have someone on the receiving end that understands what it means; otherwise it is wasted on the recipient.

While we understand that cost issues are always a factor in the creation of any effective compliance program, unless and until the banks start training their staff in money laundering Tradecraft, the actual advanced sources and methods in present use against them, the AI data is not going to be either understood nor properly and swiftly acted upon. Do not send underprepared people into harm's way; you won't get the desired results. If you don't know what you should be teaching them, ask me.

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