One of the biggest challenges the MLRO can face is that of “selling” AML/CFT to the holders of the purse-strings. Most Boards now know that they have to do something AML-ish, but some will try to pare it down to the very barest of essentials. For the MLRO trying to do his job well, this can be an enormous frustration, and so here are a few tips on how to get your own way:
- Think like a director, and use words that they will react to – such as “reputation”, “financial penalties”, “senior management responsibility”, “shareholder” and “pension”.
- Provide them with real-life examples of what has happened to firms similar to your own that have got it wrong with AML – there are plenty of scare stories out there.
- Recognise that AML is not a revenue-generator, but stress its benefits. It takes time and money to build an effective AML regime, and more time and money to keep it current. A slipshod AML regime will both expose the firm to danger, and ensure that good compliance staff leave in disgust. Failures in AML and the resulting regulatory censure will sour future business, reducing client take-on and putting off potential partners.
- Accept their criticism. Often a Board will feel aggrieved at the demands made by AML legislation and regulation, and you will bear the brunt of this. Let them have their say, murmur your sympathy, and then repeat your request (see step 1 above).
And in case you need some more encouragement, bear in mind the story of Sheila McIntosh, the only ice-cream maker on Barra in the Outer Hebrides. Often in the face of howling gales and driving rain, she takes her little red ice-cream van to every event on the island. Mind you, she also offers a handy sideline in Hebridean knitwear…