MANAGING A REMOTE FINANCIAL CRIME COMPLIANCE PROGRAM DURING COVID-19

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MANAGING A REMOTE FINANCIAL CRIMES COMPLIANCE PROGRAMS DURING COVID-19

  • Spencer Schulten, Virpa Kulkarni, Harrient Roberts, Enrico Aresu and Geoff Lash
  • Published: 26 June 2019


Global impacts of COVID-19 have accelerated a digital movement and remote working model for some elements of an anti-money laundering (‘AML’) and sanctions compliance program that likely was already in motion.

In the context of the current pandemic, financial institutions globally are facing significant challenges due to

  • A convergence of (probable) increased criminal activity and fraudulent schemes seeking to capitalize on the pandemic
  • The strains of a remote workforce
  • A decrease in staffing capacity, and level of timely communication required to run an effective AML and sanctions compliance programs (i.e., a stale AML business continuity plan (‘BCP’)
  • Changes in customer behavior – namely the ability to pay none, or only a fraction of critical bills such as mortgage payments, rent, auto loans, and credit cards

Similar to the financial crisis of 2008, the current pandemic is likely to see additional elements of fraud in many areas of the financial services industry as investors and families attempt to gain access to their funds, only to discover that they were misappropriated before COVID-19. However, the current pandemic introduces new fraudulent activity cases, namely around the misuse of government bail-out funds. These new cases are happening precisely at a time when many financial institutions are struggling to maintain pre-COVID activities, and when regulators are emphasizing the continued importance of financial crimes compliance.

This article highlights certain components of an AML and sanctions compliance program, where we have seen an acceleration in response to COVID-19, articulates associated risks, and suggests potential solutions to maintain program effectiveness. Capco believes the current pandemic highlights the need for financial services to increase investment in technology to meet the accelerating needs of its online customer base, remain competitive, and meet compliance obligations.