In our previous article titled Creating a Strong AML Compliance Culture, we talked about the elements of a strong compliance environment. Here, you can find our top tips for the Internal Audit Department.
With concerns over compliance and protection for investors constantly increasing, Internal Auditors are now faced with new responsibilities in the development and review of an organization’s AML policies, practices and measures. These are our top tips for Internal Audit Teams looking to effectively audit their organization’s compliance operations.
When evaluating the effectiveness of an organization’s AML governance culture, the Internal Audit Department should take into account the following challenges and opportunities:
- Updating and adapting to changes in Regulatory Standards: the evolving demand for transaction monitoring and sanctions screenings has increased the need for transparency in an organization’s processes and controls. Specific focus areas include data quality, back-up and recovery, privacy considerations, and validation of system effectiveness.
- Knowledge of AML technologies: familiarize yourself with your organization’s technology and ensure that all AML systems are working properly and are fine-tuned and validated on a regular basis.
- Skills Integration: Internal Audit Departments need to build an integrated team of personnel with a variety of skills, from compliance and business to technology, in order to effectively assess, deploy and maintain AML processes and technology systems.
When assessing an organization’s AML systems, the Internal Audit Department should answer the following questions:
- Operations & IT:
- Do the systems include Transaction Monitoring (TM), KYC, Sanctions and PEP Screening?
- Do the systems and data processes undergo regular maintenance and support?
- Compliance, Risk Management, IT:
- Does the Organization utilize AML Systems (TM, KYC, Sanctions Screening) to identify and report suspicious activity and/or transactions?
- Does the Organization ensure appropriate technology controls in the areas of security, on-going data integrity, back-up and recovery?
- Does the Organization utilize Model Validation of AML Technology to fine-tune and ensure compliance with regulatory requirements and standards?
- Internal Audit Review Processes:
- Are IT processes (ongoing data integrity, reconciliation checks, security, back-up procedures, etc) and configurable controls (system overrides, workflows, etc) regularly reviewed and monitored?
- Are processes reviewed, validated, and fine-tuned regularly to ensure appropriate methodology in accordance with the relevant requirements and regulations?
When designing and performing an AML Technology Audit, the Internal Audit Department must take note of the following key audit areas:
- Data Integrity
- Security & Privacy Requirements
- Change Management
- Back-up and Recovery
How can CX Financia help you?
At CX Financia, our experienced team of professionals has trained multi-cultural teams on Governance, AML/CFT, Compliance & Risk. We are passionate about building trust and security with our clients by providing a high level of personalized service.
You can find more information about our Regulatory AML Compliance and Support services here.
If you need further insights on addressing modern challenges in today’s regulatory climate, as well as information on our package training solutions, you can contact us at [email protected].