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$10 Million fine for Non-Compliance with FINRA : Here is how Financial Companies can incorporate an Agile Compliance program in 2019


Regulators have dramatically stepped up enforcement of Anti-money laundering (AML) laws and regulations and increased related criminal and civil fines. According to a recent news article from Wall Street Journal, FINRA charged a penalty of $10 Million to one of the biggest Investment Bank over Anti-Money-Laundering program. As per the news, the bank’s automated anti-money-laundering surveillance system hadn’t received critical data from several systems that would have assisted in detecting tens of billions of dollars of wire and foreign currency transfers from high-Risk money-laundering countries.


The settlement is the largest amount ever to be paid by a bank related to AML program failures. The regulatory focus on AML Compliance program weaknesses, along with the unprecedented record fines recently imposed on financial institutions, compels Chief Risk Officers (CROs), Chief Compliance Officers (CCOs) and other executives responsible for Risk management to revisit their sense of urgency regarding AML Compliance and ensure their programs meet today’s standards.


In addition to the high penalties, companies could end up paying for non-Compliance in more ways than via the wallet, such as limiting of the company’s mergers and acquisitions or joint venture activities, loss of Share Value, Reputation loss, etc. To manage and mitigate the Risk of non-Compliance, the CROs, CCOs and others who oversee Risk management must consider an assessment of  their company’s existing AML capabilities and practices, and then establishing preventative measures based on those assessments.


If the Risk evaluation reveals many existing Compliance system weaknesses, the CRO, working with the CCO and other senior executives, will have to catalyze a governance framework for Compliance that clarifies expectations and allocates key Risk management responsibilities to peer executives and the board.


CROs and CCOs at many companies can improve Compliance Risk mitigation with the following steps:

  • Have a centralized process for overall Compliance management which is Agile enough to accommodate data from multiple sources without any chance of error
  • Encourage Risk mitigation programs and processes with active and visible consideration of money laundering Risks at the Board and Senior management levels.
  • Have an independent gap analysis prepared to help management and the board target resources and tools to generate awareness about and promote Compliance
  • Evaluate whether departments with key Compliance responsibilities are properly funded, adequately staffed and have the tools and systems to identify and avoid financial crimes.
  • Reassess the adequacy of Audit coverage. Regulators have criticized companies both in private and public about the lack of audit coverage. Because of the frequency, speed and volume of financial transactions, regulators recommend quarterly reviews of Compliance.
  • Collaborate in real time with the concerned departments such as Human Resources and the Compliance team to find the right staffing levels and mix of competencies internally or externally to implement a robust and futuristic Compliance program.


The above mentioned strategy for Compliance, not only gives a competitive advantage, but also brings along long term Sustainability, Brand Value and Positive Growth. At Confident Governance, our mission is to assist Companies worldwide be truly Confident in their Risk, Compliance and Governance initiatives. Using the latest in Emerging Technologies like Artificial Intelligence, Big Data Analytics and Cloud Computing, the Governance platform offers Transparency and Real time Reporting to the Board and the C-Suite into the critical Business Processes. All of this into an Agile, Mobile, Secure and Scalable platform to assist Risk, Governance and Compliance officers to govern their Processes Anytime, Anywhere and on Any device with intuitiveness, which has been our mission to propel Companies towards Growth, Sustainability and increasing Revenues.


Let’s stay connected for Governance best practices for 2019 and beyond !


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