AML training: The Rules tell you ‘what’ but the ‘why’ makes it stick

Under the AML/CTF Act and Rules, firms are required to provide AML/CTF training to relevant staff at the start of their role, update that training on an ongoing basis, and keep records to demonstrate compliance. That’s the what.

But the legislation doesn’t explain why training matters. And unless people understand the why, AML training risks becoming a tick-box exercise that is quickly forgotten.

We sat down with Emma Senior, Founder of Alpha AML Training, to discuss what makes AML training effective and how firms preparing for Tranche 2 reforms can get this right from the start. We also asked several AML Compliance Officers (AMLCOs) / Money Laundering Reporting Officers (MLROs) from New Zealand and the UK for their lived experiences. 

Don’t forget the "why"

So Emma, you’ve worked with hundreds of AMLCOs over the years, what’s the main thing the best ones do to get great results from their AML training?

“The legislation makes it clear that staff training must be part of your AML/CTF program. One of the biggest mistakes I see is a lack of staff engagement with training and thinking that distributing a copy of the program, or using the same presentation every year, will do. It’s no wonder AML training is often described as ‘dry’! 

Instead, many of the successful AMLCOs I’ve worked with go beyond the ‘what’ of the law. Of course the training needs to focus on the ‘what’ but importantly, they also include the ‘why’ and how these rules not only protect their firm, but also help to disrupt the serious crimes that generate illicit funds in the first place.”

Michelle Garlick, MLRO, Weightmans, echoes this:

“Explain to [staff] the ‘why’ and what it means in practice rather than stating just what the regulations say. It’s about bringing it to life so they can understand what’s expected, rather than setting out a particular provision of the regulation which gets you nowhere.”

Structure matters in AML training

Double clicking into the success factors, tell us more about the need for structure in AML training.

“For new employees or newly regulated Tranche 2 firms, the AML/CTF Act and Rules can feel overwhelming. There’s a huge amount to absorb - from designated services and CDD, through to PEPs and suspicious matter reporting. And that’s just a few examples!

AMLCOs can lack the time or resources to develop clear, well-structured training. When firms try to cover all of the obligations, in a one-size-fits-all session, staff can tune out. And if they switch off, they’re not going to absorb what they need to know."

Instead, Emma emphasises that structure means breaking training down so it feels manageable and relevant to employee roles.

 "Think about when training happens - before go-live, at induction and then as regular refreshers. Make sure the content is relevant to the ML/TF risks of the business and staff roles and responsibilities. Whether that’s general awareness training for all staff to recognise ML/TF risks and escalate, or customer due diligence training for operational teams, or governance-focused topics for senior managers and boards. 

For AMLCOs, structure also means having a plan. Knowing which roles need which training, how often it will happen, and how completions and records will be tracked. “When you’ve mapped that out, you can stop worrying about gaps and start focusing on quality.”

• Timing - before implementation, induction training, on-the-job refreshers
• Topics - topics relevant to the ML/TF risks of the business and  particular roles
• Planning - format, how training records will be kept, knowledge checks to assess effectiveness

 “The reality is, staff are not going to like AML much at the beginning, and are unlikely to embrace more steps and compliance, so the training becomes really important, but it needs to be clear and relevant.” 

As Oscar Fransman of Simpson Grierson explained:

“When AML first kicked in, there was definitely some frustration. Our lawyers were used to jumping straight into the work, and suddenly we had to tell them, ‘You can’t start until we complete customer due diligence.’ Training made the difference. Once they understood that CDD is just another step in the process and that they need to plan for it, they adapted.”

Variety keeps people engaged

So you’ve spoken about structure in AML training, what about variety?

"Variety is what keeps training fresh and makes it stick. And importantly, variety is what makes sure that AML doesn’t equal boring. Just look at the popularity of true crime podcasts and shows! People are fascinated by stories of fraud and deception when they’re told in the right way. If you present AML through practical examples and case studies, and in an engaging format, suddenly it becomes compelling, not a chore.”

She’s quick to point out that variety also means recognising different learning styles. 

“Not everyone learns the same way and in today's world, where staff have a thousand things competing for focus, the best AMLCOs think about how best to engage staff. Some like to listen, others need visuals and others want to interact and test themselves. For example, online modules, videos or in-person sessions – the right mix depends on your people, systems and resources.”

Eloise Butterworth, Head of Risk and Compliance, HiveRisk, explains, "The best AMLCOs translate risk into real-world decisions. They speak clearly, listen carefully. What you say, and how you say it, matters." 

The takeaway

The AML/CTF Act and Rules set out what you must do: train staff, refresh them regularly and keep records. But the firms that will thrive under Tranche 2 will go further. They’ll build training programs around structure, variety and relevance so that staff don’t just sit through a session, they actually take it in.

As Emma summed it up, “The law gives you the ‘what’, but training  also gives you an opportunity to deliver the ‘why’. The win isn’t ticking off another annual compliance check-box - it’s when your team understands AML well enough to know the obligations and procedures relevant to their role and apply them every day. That’s when training really works.”