‘Risk Culture’ central to AML Compliance efforts and RegTech choices

Art shows a balance board on a wooden ball. There are smaller things on one side of the balance board and a single large item on the other side. Illustration supports article on Risk Culture in financial institutions.

AML solutions: Is your ‘Risk Culture’ a healthy one?

Analysis of risk culture in financial institutions can be a touchy topic. No one wants to be the wrench thrown into the machinery of a profit-making enterprise. However, risk and compliance professionals by design have responsibility for AML Compliance and managing risk. And a healthy ‘risk culture’ will help them do their jobs as designed.

Promoting a culture that aligns with Compliance requirements remains a central task of upper management in financial institutions. The stakes for prioritizing this responsibility remain high. Governments around the world continue to legislate Compliance changes to keep criminals and terrorists out of the banking system.

A 2021 literature review of the state of Risk Culture in financial institutions emphasized the importance of an institution’s culture. Culture related to Risk lays the foundation of “safer” and more AML compliant banks. The review, published in Journal of Management Control, attempted to systematize analysis of financial institutions’ management control systems.

Key elements focused on the relationship between Risk Culture and management control. It also focused on how this culture develops–for better or worse–over time.

Key elements of Risk Culture in AML

Key elements of healthy Risk Culture include four features. These are tone from the top, accountability, effective communication of challenges, and incentives to comply.

Leadership and their choices about management control systems send clear messages to team members both in and out of the Compliance department. And the choices of AML RegTech solutions and systems can also support and deepen a healthy culture for Risk Management.

AML solutions should support accountability, tone

At AML Partners, our AML experts and development teams work to support an institution’s healthy culture by building in accountability and monitoring features into the RegTechONE platform for AML Compliance. RegTechONE provides no-code workflows and no-code configurations so that institutions can align the RegTechONE platform to their exact Compliance program.

And RegTechONE can automatically monitor for Key Risk Indicators and Key Performance Indicators. It can automate screening and case creation. It can perform all manner of Know Your Customer and Know Your World due diligence. And it can automate email notifications of concerns, expired documents, and so on. And since RegTechONE archives all actions by users, institutions have a digital record that supports accountability efforts.

Choosing a Risk Culture–for better or worse

Sometimes we all feel like we are carried along on waves of momentum over which we have little control. Sometimes Risk Culture in business enterprises can feel like that. But Risk Culture, ultimately, is a choice. And leadership and team members cultivate those choices every day. We are curious about the best examples in your own work where leadership, colleagues, and technology nurtured a Risk Culture that elevated Compliance and accountability in ways that made the business better, stronger, and more profitable? We at AML Partners ask that question as we develop RegTech tools for AML Compliance and KYC Onboarding. Part of our innovation lies in helping increase efficiency and profits via technology and automation–while also supporting accountability measures and effective compliance .

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