Regulated financial entities are legally obliged to take measures to prevent financial crimes, including money laundering, terrorist financing and sanctions violations. Recent scandals reveal that anti-financial crime (AFC) controls are still inadequate at some financial institutions. The shortcomings are not matters of process or technology alone. Institutional culture also plays a crucial role.
This joint report by Oliver Wyman and ACAMS examines the AFC cultures of financial institutions globally, drawing on the findings of an online survey we conducted from December 2020 to January 2021, two roundtables and interviews with industry executives and regulators. We find that although much progress has been made in recent years, AFC cultures remain underdeveloped in certain areas. For example, many organizations still have not integrated AFC in their risk appetite framework; most remain under-resourced in proportion to the risk they face; and awareness-raising, incentives and training are inadequate, with the result that front-line staff too often think that AFC is someone else’s responsibility. AFC professionals are at times frustrated by institutional culture in which short-term profit continues to dominate.
These shortcomings can be addressed by articulating the desired elements of a healthy AFC culture, and then regularly monitoring them to assess the culture of the firm and the risks arising from it. Managing the risk of financial crime must become an integral part of the behavior of staff and not a mere box-ticking exercise.
This report provides a summary of the research methodology before discussing its key findings and making recommendations for systematically improving AFC culture. We are thankful to our survey respondents, interviewees and roundtable participants for their contributions to this research.
“Culture eats strategy for breakfast”
– attributed to Peter Drucker
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