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Paws for Thought: AML/CFT Lessons from a Pampered Pup

Writer: Jay PostmaJay Postma
Feb 203 min read

Updated: Mar 4



Ah, yes, the power of a freshly groomed pup to spark profound thoughts! Taking my dog to the groomer yesterday got me thinking about the parallels between that simple act and the complexities of AML/CFT and sanctions compliance for MSBs, Fintechs, payment processors, and banks. It's a surprisingly apt analogy. Just as a well-groomed dog is healthier and happier, a well-maintained compliance program is far more effective at protecting a financial institution. Let's explore those parallels between dog grooming and compliance:


  • Regular Maintenance (Grooming) = Ongoing Monitoring: Just like regular brushing prevents mats and tangles, consistent monitoring of transactions, customer activity, and news for sanctions updates prevents larger compliance problems from developing. Think of this as your regular "transaction scrubbing." Don't wait for a giant ball of suspicious activity to form; address smaller issues proactively.

  • Identifying Issues Early (Finding Fleas) = Early Detection Systems: A quick check during grooming might reveal fleas. Similarly, effective AML/CFT systems need to identify suspicious activity early through transaction monitoring, customer due diligence (CDD), and enhanced due diligence (EDD). The earlier you spot a potentially problematic transaction, the easier it is to mitigate the risk.

  • Specialized Tools (Grooming Scissors and Brushes) = Technology and Expertise: Professional groomers use specialized tools. Similarly, compliance teams need robust technology (transaction monitoring systems, KYC/AML software) and expertise (trained analysts) to effectively screen for suspicious activities and sanctions hits. You wouldn't use a pair of kitchen shears on my Havanese, would you? Nor should you rely on outdated or inadequate tools for compliance.

  • Client Comfort (Gentle Handling) = Customer Experience: A good groomer handles the dog gently and with care. Similarly, your institution needs to approach customer interactions with a focus on transparency and a positive customer experience. Irritated customers are less likely to cooperate with your compliance requests.

  • Post-Grooming Check (Is the dog okay?) = Ongoing Assessment and Remediation: After grooming, you check if your dog is happy and healthy. Compliance requires ongoing assessment of your program’s effectiveness through regular testing and adjustments. Identify weaknesses, and address them promptly. Regular audits are your post-grooming check.

  • Ignoring issues leads to bigger problems (Matted fur) = Ignoring Red Flags: A small mat ignored can become a big, painful problem. Similarly, ignoring red flags in transactions or customer profiles can lead to significant fines, reputational damage, and even criminal prosecution.


In short, a proactive, well-resourced, and well-trained compliance team, much like a good groomer, can keep your financial institution healthy, happy, and free from the unpleasantness of regulatory violations and criminal activity. 


Now… if you'll please excuse me, I think my compliance support dog is exhausted and deserves some praise and some treats... She’s such a good girl! (yes, she is!)


Disclaimer:

This blog post is intended for informational purposes only and does not constitute legal, accounting, or professional services advice. Our team of professionals with expertise in AML/CFT and Sanctions compliance uses AI tools like ChatGPT to support our writing process in different ways. Sometimes, AI is used to improve upon a draft we've written, while other times, it's employed to synthesize and combine information from reputable sources, such as FinCEN, FFIEC, CFPB, FATF, and state regulatory bodies, around a concept or idea. In both cases, the final content is shaped and validated by professionals to ensure accuracy, clarity, and alignment with compliance standards. Since each institution's compliance needs are unique, we recommend seeking advice from qualified professional experts in legal, accounting, or compliance consulting. The effectiveness of the strategies and practices discussed depends on your institution's specific risk profile and tolerance, so customization is advised.




 
 
 

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