A series of reforms have been proposed to bolster the effectiveness of Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) supervisory regimes. Compliance professionals from all sectors have been invited to share their invaluable insights. But what are the proposed changes?
In this article we will recap the four proposed models for the future of AML supervision in the UK: OPBAS+, PBS Consolidation, Single Professional Services Supervisor, and Single Anti-Money Laundering Supervisor.
The first model proposed is “OPBAS+”. This is a reimagining of the existing Office for Professional Body Anti-Money Laundering Supervision, and it expands on the current scope and powers of OPBAS.
This model leverages the existing infrastructure but amplifies its effectiveness by increasing coordination among Professional Body Supervisors (PBSs) and allowing for more intervention in cases of substandard supervision.
The benefit of this framework is that it promises a more uniform application of AML regulations while maintaining the flexibility of sector-specific approaches.
The PBS Consolidation model suggests the amalgamation of all PBSs into fewer, broader sector-specific supervisors. Unlike the OPBAS+ model that retains the independence of each PBS, this model envisions larger umbrella bodies overseeing the regulations across several sectors.
The benefit to this approach is that it increases consistency and eases the coordination among various sectors.
Single Professional Services Supervisor
The Single Professional Services Supervisor (SPSS) model proposes a single, centralised authority replacing all existing PBSs to supervise professional service sectors.
This model increases the supervisory consistency to the highest degree and optimises the use of resources. However, the key challenge here lies in balancing the need for overarching supervision with understanding and addressing the unique risks of different sectors.
AML and CTF supervision is complex and multifaceted, reflecting the diverse range of sectors it oversees. Each of these sectors harbours its own unique risks, characteristics, and operational nuances. Therefore, while overarching supervision promises a uniform and consistent approach to monitoring and regulation, it also introduces the challenge of understanding and addressing these sector-specific risks and nuances effectively.
Single Anti-Money Laundering Supervisor
The Single Anti-Money Laundering Supervisor (SAMS) model proposes a unified supervisor across all sectors.
This model promises maximum consistency and coordination and represents a radical departure from the current system, requiring significant investment and preparation to implement.
Which of these would work the best?
Selecting the best model isn't about choosing the most efficient or the most consolidated. It's about achieving balance - ensuring that the chosen model aligns with our existing system's strengths while addressing its weaknesses.
The proposed reforms all seek to optimise effectiveness, coordination, and feasibility. However, they each embody different degrees of consolidation and sector-specific approaches.
As professionals in the trenches, our knowledge of sector-specific risks, practices, and challenges is essential. Will the more consolidated models sacrifice valuable sector-specific insights for broader consistency? How can we ensure a seamless transition from multiple PBSs to a single supervisory authority, should that be the chosen path? How can we balance centralisation and uniformity with the need for tailored approaches to different sectors?
As AML professionals who are knowledgeable in this space, it’s important to ask these questions, and many more, in order to iterate on and improve upon the proposed reform. It may be difficult to educate individuals on these topics, but too often these processes are completed without input from those with real life examples. Sharing our thoughts throughout this process has never been more critical.
It is often said that we are only as strong as our weakest link. As such, strengthening our AML and CTF supervisory regimes is a collective endeavour. We are invited to be more than passive recipients of regulatory change; and become active participants shaping the future of our industry.
The bottom line
These reforms represent a critical milestone in the evolution of AML and CTF supervision. They signify our commitment to maintaining an agile and robust supervisory system that can rise to new challenges in the ever-changing landscape of financial crimes. As we progress towards reform, it is our collective responsibility as compliance professionals to actively participate in these discussions, contributing our unique perspectives and lived experiences to shape a future-proof AML supervisory system.
By bringing our voices to the forefront of this reform process, we can ensure that the resulting supervisory framework is not just robust and effective but also pragmatic, grounded in real-world experiences, and future-ready.
It is time for us to come together in crafting a reform that is beneficial for all businesses involved, and that will safeguard the integrity of our financial systems for years to come.
About First AML
First AML is an AML technology provider, and the maker of Source, an all-in-one AML platform. Source powers thousands of compliance experts around the globe to reduce the time and cost burden of complex and international entity KYC. Its enterprise-wide, long term approach to the KYC / CDD data lifecycle addresses time and cost challenges while minimising compliance, reputational and security risks.