AML/CFT Learning and Development Strategies for DNFBPs
AML/CFT Learning and Development Strategies for DNFBPs
In accordance with AML/CFT laws in UAE, the Designated Non-Financial Businesses and Professions (DNFBPs) are required to have adequate policies, procedures, and controls in place to conduct and impart employee training to ensure AML/CFT Compliance. This goal can be achieved with the help of a well-formulated AML/CFT Learning & Development (L&D) Strategy. Some of its elements are as discussed hereunder:
- Analysis of AML/CFT Training Needs
- Specification of AML/CFT Learning Objectives
- Formulation of AML/CFT Training Module Design
- AML/CFT L&D Monitoring & Evaluation
Let us discuss each of the elements in further detail:
Analysis of AML/CFT Training Needs
Identifying Organisational Needs:
Identifying Organisational Needs based on:
- Size of the DNFBP
- Sector of the DNFBP
- ML/FT Risk to which the Business is exposed to
- Degree, extent, and efficacy levels of AML/CFT Control Measures as defined in the Enterprise-Wide Risk Assessment (EWRA)
Mapping Skills at the Functional Level and Defining their AML/CFT L&D Needs:
These functions include but are not limited to the following:
- Front Office Staff facing clients such as the sales team to identify ML/FT red flags
- Screening Analyst: In the context of their knowledge and experience regarding:
- When and how to Screen DNFBP’s customers across Relevant and applicable Sanctions Lists such as UAE Local Terrorist Lists, UNSC Consolidated List, etc.
- Proficiency with the use of Screening Tools or Software
- Proficiency with Batch or Bulk Screening and Matches Disambiguation
- Distinction in individual and corporate screening requirements
- KYC Analyst: In the context of their knowledge and experience regarding:
- Customer Document Handling
- Extracting and Interpreting Useful Information from KYC Documents
- Questions to be included in the KYC Questionnaire and their implications
- Entering KYC information into KYC Registers and its maintenance in alignment with UAE’s regulator-specific Record-Keeping requirements such as DIFC, ADGM, VARA, and SCA
- AML/CFT Risk Analyst: In the context of their knowledge and experience regarding:
- Conducting Customer Risk Assessment (CRA)
- Developing Customer Profile and assigning appropriate Risk Rating/Scoring
- Risk Rating Matrices Development, Meeting Record-Keeping Requirements, and maintaining Risk Registers
- Knowledge of Inherent, Residual, Gross/Net Risk in consonance with DNFBPs EWRA
- Transaction Monitoring Analyst: In the context of their knowledge and experience regarding:
- Ability to assist with Scenario Development, Ongoing Monitoring, and Transaction Monitoring
- Handling Rule Management, Alerts Prioritization, Review & Investigation
- Case Management and Record-Keeping
- Implementation and Compliance with Designated Transaction Reporting Requirements such as DPMSR and REAR
- AML Compliance Officer (AML CO) or Money Laundering Reporting Officer (MLRO)
- Preparation and Implementation of DNFBP’s AML/CFT Policies, Procedures, & Controls
- Proficiency in preparation and filing of AML/CFT Semi-Annual Report
- Proficiency with Inhouse AML/CFT Compliance Department Management
- Internal SAR/STR investigation & Regulatory Reporting to UAE FIU through goAML Portal for filing reports such as SAR/STR, FFR, PNMR, HRC, HRCA, and Designated Transaction reports such as REAR (for Real Estate sector) or DPMSR (for Precious Metals and Stones sector)
- Obtaining Senior Management Approval
- Senior Management
- Proficiency in Reviewing AML/CFT Reports
- Appointment of AML CO or MLRO
- Approving and Signing off AML/CFT Policies, Procedures, and Control Measures
- Understanding High-Risk Customers to approve their onboarding
- AML/CFP Policies, Procedures, and Controls Update and Remediation
Identifying Individual Performance-Driven Needs:
- Performance Reviews
- Developing Performance Metrics to identify proficiency in handling AML/CFT Compliance tasks by identifying KPIs for relevant functions such as:
- Screening Analyst
- KYC Analyst
- AML/CFT Risk Analyst
- Transaction Monitoring Analyst
- AML CO or MLRO
- Senior Management
Specification of AML/CFT Learning Objectives
Aimed to fulfill the gap between the existing skill level of relevant functions and desired skill, proficiency, and performance output expected from relevant functions to meet organizational goals in achieving AML/CFT compliance excellence through the strengthening by L&D of relevant personnel. This can be achieved by considering factors such as:
- Outcomes of topical risk assessment and UAE’s National Risk Assessment (NRA)
- Making the right selection of screening and other automation tools and their compatibility with employee skills
- Identifying internal and external sources for L&D strategy implementation and formulation of AML/CFT training module design
Formulation of AML/CFT Training Module Design:
Aimed to connect with and impart AML/CFT L&D to relevant functions through organizing and finding the right balance with the following elements to suit DNFBP’s organizational needs:
- Guest Lectures/ Workshops
- Experiential Activities such as Case Studies, Scenario Building, Role Playing in Situational Simulations
- Job Shadowing for lateral as well as linear knowledge transfer for improved decision-making across different AML/CFT compliance roles
- Mentoring by the second and third lines of defense to their subordinates
AML/CFT L&D Monitoring & Evaluation:
Aimed to evaluate and link AML/CFT L&D Program Learning Outcomes with Personnel Performance Outcomes to ensure that the L&D Program delivers the desired outcome for achieving AML Compliance excellence.
AML/CFT L&D Strategy acts as a tool to feed two birds with one scone!
- The First Bird is the Regulator, requiring the DNFBP to adhere to AML/CFT Compliance requirements by ensuring adequate AML/CFT training of its employees to avoid noncompliance fines and penalties and
- The Second Bird is the problem of filling the knowledge and skill gap of employees to meet organizational AML/CFT compliance goals.
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About the Author
Pathik Shah
FCA, CAMS, CISA, CS, DISA (ICAI), FAFP (ICAI)
Pathik is a Chartered Accountant with more than 26 years of experience in governance, risk, and compliance. He helps companies with end-to-end AML compliance services, from conducting Enterprise- Wide Risk Assessments to implementing the robust AML Compliance framework. He has played a pivotal role as a functional expert in developing and implementing RegTech solutions for streamlined compliance.