Ready, steady, MLRO!

As regular readers will know, I am rather fond of a biscuit or two – and particularly the Jaffa Cake.  (Yes, it’s a biscuit not a cake, despite the name.  The way to tell is that cakes go hard when they’re stale, whereas biscuits go soft.)  Jaffa Cakes come in boxes of twelve, and along with all other processed food items in the UK, a “traffic light” logo on that box indicating the product’s levels of sugars, fats, salts and so on: red is high, amber is medium and green is low.  (Jaffa Cakes are obviously extremely good for you, with that orangey centre.)  The reason for all of this biscuit-related flannel is that I have been wondering whether any MLROs have considered using – for internal, staff-directing purposes only, of course – a traffic light system for applicants and indeed clients.

My reasoning is that – the colour-blind aside – we are all very quick to respond to the red/amber/green signal.  I believe that it is universal, which would take care of any translation difficulties.  Of course it only works if you have three options – green for standard due diligence, amber for enhanced due diligence, and red for rejection, for instance.  Although, thinking about it, you could use the system to track an application, or to monitor reviews – so green is “all done, we’re ready to continue”, amber is “we’re getting there, but work still to be done before we accept/maintain this client”, and red is “big obstacles – lots still to be done”.  In fact, I think I like this application better: you could move the client file into different coloured folders – paper or virtual – as it progresses.  I may patent it – although the estate of Garrett Morgan might have something to say about that.

This entry was posted in AML, Due diligence, Money laundering and tagged , , , , . Bookmark the permalink.

4 Responses to Ready, steady, MLRO!

  1. Amanda Reilly says:

    You could also use it for colleagues, those who are fully on board with all things AML/CFT related those who need a bit of guidance every now and again and those who form part of your monthly CMP!

    • Welcome to the blog, Amanda, and thank you for your comment. That’s an interesting use of the system, although perhaps one that the MLRO will keep to himself! The red ones might be rather more numerous than we would hope…
      Best wishes from Susan

  2. Steve Watson says:

    Hi Susan

    I introduced a version of this when working in the Bank over ten years ago. My customer acceptance policy scored applicants and the numeric scores were split into 3 ranges, using just such a traffic light system, which staff used to determine the level of due diligence or indeed, when scored red, to refer to compliance before the applicant had even put pen to paper to get an agreement in principle that we were willing to consider them. It also allowed us to use this for ongoing monitoring.

    best regards


    • Hi Steve, Welcome to the blog and thank you for your comment.
      This sounds like an excellent refinement of the system – I really like the idea of red meaning “get agreement in principle [before wasting anyone’s time]”. Other MLROs might take it on, I think.
      Best wishes from Susan

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