Money laundering prevention - health check for your company

High requirements for money laundering prevention

With increasing globalization, the risk of companies being misused for the purposes of money laundering and terrorist financing has risen dramatically. Contrary to popular belief, this can affect companies of any size. This is because "dirty money" does not only come from predicate offenses such as drug trafficking, human trafficking and prostitution. Assets that originate from traditional white-collar crimes such as bribery, tax evasion or fraud are also included.

Money laundering prevention requires legally "obliged" companies to create, implement and comply with legal guidelines. In fulfilling and implementing these primarily internal compliance requirements, companies often lose their internal customer focus and pass on the internal work (the necessary evil, so to speak) to their customers via an even greater flood of emails and PDFs.

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Customer focus gets lost in the jungle of legal requirements

The Money Laundering Act (GwG) and the "Application and Interpretation Guidelines" derived from it by the almost 300 German supervisory authorities for the 16 segments of obligated companies set out a large number of requirements and guidelines. However, these lack concrete recommendations and implementation guidelines that ensure efficient and customer-friendly processing of the requirements in addition to compliance with the legal requirements. The customer focus is lost in the jungle of legal requirements such as the concept of "digitalization". The word "digitalization" does not appear in any of the 59 paragraphs and 2 annexes of the Money Laundering Act. Implementation-relevant requirements of the supervisory authorities remain soft, elastic and open to interpretation.

The Financial Action Task Force (FATF) - the global supervisory authority for money laundering and terrorist financing - is calling for the potential of digitalization to be exploited in order to make the fight against money laundering and terrorist financing faster, cheaper and more efficient.

In the context of ever-increasing complexity, it is all the more important to find answers to the question of how to break the vicious circle between increasing compliance requirements and efficient collaboration with customers.

Money Laundering Health Check - Guidelines for compliance, efficiency and customer focus 

For this reason, we have developed a money laundering (prevention) health check which, in addition to the primary goal of legal compliance, also focuses on the goals of efficiency and customer integration. 

The BetterCo Health-Check supports companies subject to AMLA in an understandable and concrete form,

• understand their compliance gaps within the framework of the currently applicable legal requirements,
• classify these requirements in order to close the identified gaps and 
• derive pragmatic guidelines for the implementation of an efficient and customer-centered money laundering process

The AMLA only provides a very simple structure that is based on the concepts of risk management, internal security measures and customer due diligence obligations for the onboarding of customers and the monitoring of customers and their transactions. We break down this structure somewhat. 

Our guidelines are based on a uniform business model approach in which we embed the MLA structure: good governance is the basis for deriving well-designed processes that are implemented on the basis of a well-trained and motivated organization and modern systems in order to also achieve a high level of customer orientation.   

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The combination of the AMLA structure and the business model approach (see figure) results in 7 categories, which we use to carry out the "Money Laundering Health Check":

• Governance to derive measures for strategy and quality assurance,
• Customer onboarding processes for identifying and verifying the identity of customers
• Risk management processes for classifying, assessing and mitigating risks
• Monitoring of processes for monitoring status changes by customers or transactions
• Organization for employee reviews and training and
• systems, the requirements for the ability to provide information to supervisory authorities, the documentation and auditability of all data and ...
• Customer collaboration - to ensure that internal requirements are not passed on to customers.

What are the "maturity levels" of our health check?

The BetterCo Health Check is a maturity model that shows the strengths and weaknesses of the company in comparison to a defined standard. We have based this standard on the Financial Maturity Model for Anti-Money Laundering. It distinguishes five "maturity levels" for each of the seven categories:

• Not Compliant - the current status does not meet any compliance requirements
• Partially compliant - the current status only partially fulfills compliance requirements 
• Compliant - current status meets compliance requirements but is largely email and paper based only
• Compliant & Efficient - current status meets compliance requirements and fulfills efficiency requirements covered by systems 
• Compliant & Integrated - the current status fulfills the compliance requirements and meets integration requirements that are given for a meaningful integration of customers

Maturity models generally pursue a cooperative approach. This contrasts with compliance audits, whose results are usually binary "compliant" or "non-compliant" and therefore much more confrontational. While the goal of compliance audits is also to uncover risks and possible violations of AML legislation and regulations, the goal of maturity assessments is to guide process improvements, facilitate the embedding of cultural change and develop the organization's compliance capability.

Getting started with the health check

The BetterCo Money Laundering (Prevention) Health Check offers an introduction on 3 levels

• Use our Health Check infographicto gain an initial overview and assess your "maturity level" along the 7 categories defined above. Download the infographic here ->> Health-Check infographic

• Use our Health Check Questionnaire to answer around 30 questions across the 7 categories. We then summarize the results of your answers in a report and make them clearly available to you. Start here ->>
• We are also happy to provide you with our advice and support for a company-specific risk analysis, which we also implement digitally. Contact us ->> Write a message now

Health-Check infographic - an assessment in just a few minutes

We provide you with our Health Check infographic to give you an overview of our maturity model. Along the seven categories and five maturity levels, you can make an initial classification of your "status".

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Health-Check Questionnaire - a content guide in 30 minutes

To deepen your first impression, answer our Health Check questionnaire. This contains around 30 questions in seven categories. You will need around 15-30 minutes to complete the questionnaire. Based on the criteria provided by the questionnaire, you will classify your compliance status on a scale from "1 - no compliance" to "5 - high compliance". 

You have the option of recording your comments along the questions and completing the questionnaire in several steps (as long as you do not ask us to delete your data). As a result, you will receive a report with the questions and your answers and comments as well as an overview of your status in the form of a radar chart (often called a polar or spider chart - see example below) 

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Health-Check Audit - a comprehensive risk analysis in a few days

We are also happy to provide you with our advice and support for a company-specific risk analysis, which we also implement digitally in a similar way to the questionnaire. We cooperate with certified money laundering officers for this purpose.

In the form of expert interviews and evaluation of company documents, we work with you to analyze the company, its field of activity, employee reliability and customer structure. On the basis of more than 100 questions, we examine the extent to which money laundering regulations need to be observed.

As a result, the internal structures are created to fulfill the obligations of the AMLA. We work with you to develop company-specific typologies. The results are documented and evaluated in a risk report.

Together we ensure that the company cannot be misused for money laundering and terrorist financing. Personal liability risks are highlighted.

Compliance Audit Comprehensive compliance audits are required to fulfill due diligence and KYC requirements. A robust compliance audit process will ensure that your organization is NASA compliant and complies with all AML regulations.

Conclusion

The Money Laundering Health Check is an important tool for compliance with anti-money laundering legislation. It provides an overview of the requirements and obligations of the law and gives a clear picture of the current situation. This enables companies to take measures to improve their compliance and minimize their risks. 

Our expanded view of money laundering prevention, which focuses not only on CONFORMITY but also on EFFICIENCY AND CUSTOMER FOCUS, naturally results in further requirements for a system platform. They need a platform that allows them to carry out their work end-to-end across the entire customer journey - smoothly, audit-proof and with the ability to provide information. In addition, such a platform would provide users with a user-friendly experience that makes it easy to find the information they need quickly, efficiently and in a focused manner .

With such a platform, you can take action to improve your compliance position by working with your customers, automating processes and tracking data across different systems in a customizable, open and collaborative way . 

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Interested in getting to know BetterCo better?

Book a free product demo and find out how BetterCo realizes a clear, common and consistent vision for regulated companies and all stakeholders. And on top of that, measurably reduce effort, time and costs.

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