In light of the recent HSBC AML/ CFT breakdown exposed during the Congressional hearing, it’s important for analysts to reflect on their career mortality. Are your skill sets up to par with the industry standards? Are your getting the training and education you need to excel in the field and meet objectives? Do your current strategies allow you to accomplish tasks and meet deadlines?
For the rest of us reading about the breakdowns from the sidelines here are several takeaways worth discussing:
1. Emails indicate that compliance and AML departments were understaffed and existing personnel were under tremendous pressure to complete large scale reviews and backlogs numbering in the hundreds and thousands. In one instance 8 compliance officers were responsible for manual reviews of 30,000 OFAC alerts per week, in another 3,800 alerts per person per month. These numbers are indicative of a stressful, burdensome environment in which tactical level staff were faced with considerable challenges to manage caseloads, conduct research and draft reports in a short amount of time and one institutional problem created another; no training and no education. There was, simply, no time or money.
The HSBC case provides an example of how a localized, micro level team and departmental problem, becomes an institutional and industry problem and vice versa. AML and compliance personnel tasked with any type of analytical responsibilities should attend training on a quarterly basis.
2. The HSBC case supports the theory that U.S. centric financial intelligence policies and procedures (AML and CFT) have not been effectively implemented into U.S. linked financial located in key foreign partner nations. Implementation of the technological infrastructure to support AML and compliance monitoring and review systems is incredibly difficult, enforcement is nearly impossible. A review of any number of the Financial Action Task Force Mutual Evaluations will support this unfortunate conclusion. The industry, much like the Intelligence Community prior to 9/11, cannot continue to operate in a vacuum.
Analysts, at every level, should understand the tactical level responsibilities of their counterparts in key foreign nations. The discrepancy in perspective has to be addressed through training, role playing and other educational events both in the U.S. and abroad. Analysis is about more than just drawing conclusions sitting in front of a computer.
Additional mind boggling evidence can be found here.