MONEY LAUNDERING IN CANADA 2016FINANCIAL CRIME, COMPLIANCE & REGULATION

HOW TO CONDUCT AN AML SYSTEM ASSESSMENT

presented by

PRESENTATION

KEITH FURST

ANTI-MONEYLAUNDERING (AML)SYSTEM

OVERVIEW

Implementation assessment

Ongoing data quality

Model performance

TECHNICALDOCUMENTATION

Architecture

Functional Specification

Extract, Transform and Load (ETL) process

Operations manual

Inadequate documentation could be a risk for AML system operations because of staff attrition.

AUDIT ANDCONTROLS

If, the above procedures are not implemented then it could increase the risk for failures in the IT department which increases the risk to Compliance (owner of the AML system).

Error handling

Database backups

Source code control

DATA RECONCILIATION

Validating the counts of source data and comparing counts in the AML system is crucial for accountability and producing an audit trail.

DATA VOLUMETRENDS

Volatility in the daily record count of crucial transaction files could be a symptom of issues in the ETL process.

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

September 2016 Record Count

ONGOINGDATAVALIDATION

NULL check

Referential Integrity

Range of values

Data can change over time so it is essential to build ongoing validation processes to ensure accuracy and make configuration changes as needed.

CLIENT ONBOARDINGSTANDARDIZATION

If, new client data is captured without strict standards then the quality of results in the AML and/ or fraud system will degrade. i.e. Address validation and account takeover incidents.

Names

Addresses

Phone numbers

Tax identification

MODELPERFORMANCE

Distinct account / alert ratio

STR ratio

High risk entity attributes

Group segmentation

Thresholds and scoring

Creating metrics to evaluate a model’s performance over time is a way to identify trends and improvements for optimization.

INSUMMARY

Is employee attrition a risk because of lack of documentation ?

Are you monitoring for data quality red flags on a daily basis?

Is your AML dashboard helping to identify trends at the enterprise level?

QUESTIONS?