The annual ACAMS Hollywood conference presented a fantastic opportunity to catch up with clients, colleagues and friends.
On the first night, Sigma hosted a dinner party with attendees spanning senior AML and sanctions practitioners, former regulators, tech companies, law enforcement and professional service providers. The evening sparked insightful conversations on key themes that were prominent throughout the conference itself.
Our Top 4 Insights from ACAMS Hollywood
- There's a general desire to move to greater automation and data-led processes across risk and compliance functions. This was true for small and large firms alike. Core needs ranged from speeding up investigations, to simplifying onboarding and ongoing customer risk evaluation, to consolidating KYC processes for efficiency gains. We found increased interest in perpetual KYC, as well as a number of case management approaches offering further automation for investigations and due diligence through AI.
- Legacy approaches and traditional data sources are viewed as insufficient in isolation. The general risk surface is expanding for everyone (and not just regulated financial institutions), requiring a more holistic view of risk using a combination of internal and external data. The capabilities of traditional vendors are now being augmented through entity resolution and graphing techniques that address growing legal and regulatory obligations for export controls, sanctions, forced labor and corruption.
- The rise of accessible AI is on everyone’s mind. Institutions and tech companies continue to explore AI as a means to greater efficiency. The best application for generative AI and other novel approaches (e.g., ChatGPT/Bard) remains unclear. However, many innovative ideas were shared by participants. Some early use cases include automating aspects of a transaction monitoring investigator’s tasks, like writing the SAR narrative or questioning certain behaviors and transactions.
- The rapidly changing sanctions landscape is generally putting pressure on industry. Vigilance needs to keep pace with the rollout of sanctions, including sanctions against Russia which increased to over 2,500 new names since the invasion of Ukraine. Readiness regarding the potential for sanctions vis-a-vis China and/or other challenges that arise from great power conflict were top of mind.
What Else Was on the Radar at ACAMS Hollywood
- Environmental social and governance (ESG) considerations. At Sigma, we have long seen robust financial crime compliance as a core social and governance issue. This view is gaining popularity and was the focus of an interesting session on the convergence of ESG and anti-financial crime this year.
- Knowing your customers’ counterparties is increasingly important. Evaluating who your customers are working with is both important for evaluating financial crime risk, as well as understanding your customer from a 360 degree view. This is particularly true for payment companies and correspondent banking providers to keep in mind.
- Network analytics are critical enablers for organizations of all sizes. Sanctioned individuals and companies, as well as traditional money laundering organizations, hide behind complex webs to obfuscate their true identities. AML, sanctions and other compliance obligations require firms to use more data and increasingly sophisticated technologies to manage their risks. Leveraging both internal and external data, firms can quickly surface risk that would otherwise be missed.
- Cryptocurrencies, digital activities, and virtual asset service providers continues to draw regulator attention. Risk from this sector, particularly over the last year, has drawn the attention of regulators, with further reviews expected this year. A shifting landscape is expected as products, services and regulations continue to evolve, making robust AML and sanctions programs absolutely essential.
- Intense discussions regarding The Corporate Transparency Act. Conversations ranged from how banks would reconcile what their customers say, to what should be in the Beneficial Ownership Information (BOI) database, to whether or not anyone (beyond law enforcement) will be able to leverage that information to fight financial crime.
Overall, the level of reflection and deep engagement by participants, who were energized by ideas around effectiveness in the fight against financial crime, was tremendous.
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