About once a month, I get an email or phone call from someone who has produced a software “solution” to help MLROs – often a CDD system, or a transaction monitoring gizmo. And what they want is to show me their product (that’s what they say) so that I will recommend it to my clients (that’s what they mean). And I always say no. This is partly because I’m really not that interested in software – my love is for face-to-face training and advice, and for the written word. But it is also because I feel that, in order to maintain my usefulness to MLROs, I need to remain free of any commercial bias; all I ever say to those MLROs is that there are software packages out there, and some like them and some people don’t, and the best thing is to ask other MLROs for their recommendations and warnings.
All of this is on my mind thanks to the recent(ish) BBC story about HSBC and World-Check. Well, I suppose the headline story was about HSBC and de-risking, but inevitably it turned to the question of reliance on automated CDD systems. Like Peter Oborne, the author of the article, I have not seen World-Check in action, but the lesson seems to be the familiar one that I have parroted in countless workshops and training sessions: these systems (World-Check and their competitors alike) are not a silver bullet. They do not have access to special, secret information denied the rest of us. As the BBC article quotes from World-Check itself: “World-Check uses only reliable and reputable public domain sources (such as official sanctions lists, law and regulatory enforcement lists, government sources and trustworthy media publications) for risk-based information or allegations about an individual or entity.” World-Check and other similar services provide consolidation and standardisation of information – which is a pretty great service, of course, but not in any way a replacement for the MLRO’s own experience-based judgements. As with so many aspects of AML, you can outsource the work, but not the legal responsibility for that work being done properly.