What is it?
Financial crimes management consulting is a subset of
regulatory compliance consulting and relates to efforts in
meeting specific regulations designed to combat money
laundering and sanctions violations, although many firms
are broadening their financial crimes practices to also encompass fraud, bribery, corruption, and even cybersecurity. Financial crimes consulting came into its own over
the past fifteen years as rising geopolitical events and
terrorism prompted governments to crack down on the
responsible perpetrators by shutting down their sources
and means of funding. Through enforcement by various
agencies, Governments have enlisted financial institutions, in their role as financial intermediaries, to identify
and report financial crime and assure industry adherence
through the use of high profile enforcement actions with
large penalties for non-compliance.
The fundamental need for Financial Crimes con-
sulting is driven by a need primarily by financial in-
stitutions to establish programs to comply with An-
ti-Money-Laundering (“AML”) related regulations
around customer onboarding and “know-your-custom-
er” due diligence requirements, transaction monitoring
policies, procedures, and systems, and risk assessment
design and execution.
Before many institutions could establish or
strengthen these AML program elements, waves of
stricter AML-related regulation resulted in numerous
high profile enforcement actions, spiking consulting
demand for crisis-oriented, regulatory response and
remediation of deficiencies discovered by regulatory
examiners around these core areas.
While regulatory response and remediation services
are driving current demand, clients are beginning to
catch-up with a slowing pace of new regulation providing an opportunity for clients to move beyond reactive
backward-looking remediation activities toward more
proactive forward-looking program design and process
improvement with some clients considering even more
aspirational technology transformations.
After years of throwing money and bodies at reactive, ad hoc compliance initiatives, there is a tremendous opportunity for productivity gains through the
thoughtful application of measurement, standardization, demand management, and lean processes. Moreover, new technology solutions and data methods offer
the opportunity for transformative advances in lowering costs while improving the effectiveness and efficiency of the end-to-end processes needed to monitor,
detect and report financial crime. That said, a majority
of institutions are still very much at the low end of the
AML maturity curve. Service providers aspire to offer
a full complement of services needed to address client
needs across the financial crime maturity lifecycle.
■ Regulatory Response & Remediation: These firms offer
cadres of knowledgeable, well-trained, global resources
to help clients gather, validate and analyze huge volumes of fragmented customer and transaction data, often under tight regulator-imposed deadlines. They may
also act as a disinterested intermediary providing independent testing and assessments to expose the nature
and extent of identified or potential deficiencies.
■ Program Design & Enhancement firms: Firms in this
group seek to bring together and coordinate the right
Financial Crimes Management Consulting: Growth Mode
BY NAIMA HOQUE ESSING
Financial Crimes Consulting Framework
Source: The ALM Vanguard: Financial Crimes Consulting, ALM Intelligence