With billions of pounds fraudulently filtered through banks every single year, no modern-day business can afford to ignore the issue of money laundering. In a corporate world where money can change hands at astonishing speeds, large-scale financial fraud is an issue that the government is increasingly attempting to tackle with both hands. Nowadays, all companies must be able to show the authorities that they are actively complying with anti-money laundering legislation at every possible opportunity.
Money laundering is a complex topic and the reality is that you may not be wholly familiar with the risks it poses for you and your company. Businesses do not need to be directly involved with fraudulent schemes to get into difficulties with the law – all it takes is a single negligent action or working with a party who has failed to adhere to anti-money laundering rules and regulations.
Money laundering is huge danger for every company in the UK, and discussed here are six essential steps that can help you to save your business.
Creating and implementing a forceful and sophisticated anti-money laundering strategy is the very first step you ought to take in order to keep your business operating in a safe and secure manner.
Every company is obliged to comply with all the rules and regulations surrounding anti-money laundering, and you must take responsibility for the actions of your business. By taking care to fashion a professional strategy in accordance with anti-money laundering laws, you will be able maintain tight control of the operations of your business and be fully aware of every process and action. One way to do this is by having policy management software in place, as this can go a long way to ensuring all data is recorded and compliance measures are being met every single step of the way.
Once you have shaped a suitable strategy, it is imperative to place a key member of the business in charge of applying it – such as a director on the executive committee. Also ensure there are direct reporting lines open between any Money Lending Reporting Officers and the Chief Executive in order to allow for clear, transparent and effective communication at all times.
Show You’re Serious
Having an anti-money laundering strategy in place is only valuable when you show your employees, clients, suppliers and partners that you’re serious about it – you must back up your claims to be compliant to prove how committed you are to the cause. Reiterating the message about your strict policy on anti-money laundering on the company website and intranet is a good start. Annual testing is recommended to ensure your employees are aware of the signs of money laundering and the processes you have in place to spot and report it.
Every money laundering concern must be handled with utmost seriousness – no matter how flimsy it may appear on first glance. Create a secure communications line that staff can use to express concerns about money laundering, and ensure there is a way for stakeholders to raise the alarm without ever having to feel panicked or uncertain about the process. It is vital to build a working environment where people feel as though they can trust the company to handle these types of issues in a professional manner. If a member of staff feels like making a complaint will put their good reputation or future career in jeopardy, they are likely to turn the other cheek and be hesitant about reporting their suspicions.
Manage, Record, And Combat Your Risks
Effective and proper management of risk registers is essential in combating the dangers that can arise in connection with money laundering.
First, it is important to identify all of the money laundering-related risks your business may encounter at any time, and then implement the precautions you’ll need to take as part of an all-encompassing money-laundering strategy.
Make certain that key individuals within the company – including the board and shareholders – are also made aware of these risks and that everyone involved in running the business is on the same page.
Once you have established what these risks are, record them in a risk register, and frequently revisit this register to determine its validity and accuracy. Investing in risk management software can help to preserve the security of your company, as it will help you to highlight and address any issues immediately.
Know Your Clients, Partners And Customers
The only way you can truly understand your clients, partners, customers and any third parties is by conducting meticulous due diligence and determining all the data you have on these companies and individuals is up to date and accurate.
Every party you work with must be fully aware of your anti-money laundering policies and regulations and they must also be willing to sign an agreement that compels them to operate in accordance with these guidelines.
Be sure to keep every company you work with informed about any changes you make to your strategies, and if there is ever any reluctance on their part to agree to these terms you should seriously reconsider doing business with them. The same goes for any companies who become embroiled in money-laundering investigations or any clients that ‘fail’ the standards set in your due diligence and research. Never, ever, be afraid to walk away. It might feel like a tough decision at the time, but the truth is you can never completely trust a client who is failing to meet standards or operating outside of agreed regulations.
Check, Check, And Double Check
Keeping yourself in the loop with regard to the latest anti-money laundering rules and regulations can guarantee your company remains fully compliant and stays protected from fraudulent parties.
Consistently check your anti-money laundering strategy and then double and triple check to ensure it falls in line with all the latest compliance laws and data protection guidelines. If there are ever any changes that need to be made, take the time to record your findings and immediately report these to the board of directors and other key individuals within your organisation.
Ensure your strategy, data, findings, and recordings are all easily accessible when it comes to inspections or audits.
Investigations into fraudulent activity can drag on for several weeks if a company has not organised their data or made it easy to read/access, which can lead to production and operations slowing to a crawl and ultimately damaging profit margins.
By investing in content management software, you can ensure all your data is effectively and clearly organised, collated and managed – allowing audits to be performed in a swift and effective manner that minimises company downtime.
Red Flag Alert can help you to successfully combat the dangers of money laundering and financial fraud. We have recently introduced a specialised anti-money laundering service. There is no need to collect or store physical documents in the vast majority of cases – this means that all your important data remains categorised and completely secure (minimising paper waste in the process), giving you an audit trail and keeps you on the right side of the law. Available via our world-class API and with a simple to use interface, it enables you to effectively manage all your data, track all your changes, record all your risks, and organise your strategies with an easy-to-operate, consolidated database.