Thursday, December 7, 2023



I made an important point yesterday, during my ACAMS SWITZERLAND virtual presentation, which was picked up by an attendee, and which deserves to be stressed here. Ever since the 1980s, when money laundering of narcotics profits expanded to serve the kingpins and narcotics traffickers who vended their products to eager American and Canadian consumers, compliance officers have fought a losing war against professional money launderers, the lawyers, accountants and bankers who successfully cleaned narco-profits through the global financial structure, often with total impunity. Some authorities estimated that compliance only caught 2-3% of the dirty money transiting the world's banks at that time.

The success rate in 2024 will not be much better, in my humble opinion, but there is a glimmer of hope on the horizon. Advanced next-generation AML technology, powered by Artificial Intelligence, and employing a number of other new features, is on the verge of creating software programs that have, for the first time, the ability to interdict, in real-time rather than belatedly, money laundering in the act. 

New programs, designed to catch laundrymen at the three critical points where there are often compliance failures...

(1) At Account Opening.

(2) During Transaction Monitoring.

(3) Six months after  accounts are opened, when compliance officers let their guard down with what they perceive as low-risk bank clients.

... are either just now becoming commonplace, or are just over the horizon where they can be expected to appear commercially available. These programs, which will allow compliance officers to take a huge bite out of money laundering, will tip the balance in their favor for the first time. 

What is critically important is compliance departments must sensitize themselves to all the unfolding developments in the industry; attend all the major conferences, where software vendors demonstrate their new wares; engage in practical Proof of Concept tests to learn which newly-unveiled products are useful and efficient; and delegate this ongoing new product exploration to specific, experienced members of each compliance team, so that nothing is missed in the way of new and emerging AML solutions.

This is critical, because I can assure you that your laundrymen opponents are reading all the trade media, sending lawyers to these same conferences and AML events, and taking what they have learned about new industry developments to heart. They may even acquire, through indirect means, the same new programs that interest you, so that they can try to find innovative ways to deal with them, but the really innovative new software will be difficult or impossible to circumvent. Compliance use of such effective advanced technology will trump their efforts, provided it is actually adopted, and religiously employed daily.

Therefore, I cannot emphasize strongly enough: look at all the new AML offerings, test them out on the job, and adopt the best of them. Catch the money launderers through superior technology, and change the game in your favor, for the first time; Good luck.

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