Staying on top of new regulations and emerging financial crime risks is a constant challenge for financial institutions. Firms must grapple with a steady stream of new sanctions designations, evolving fraud typologies and terrorist financing threats, and even entirely new regulatory regimes (looking at you, AMLA). This fast-evolving landscape is one reason why most regulators insist on ongoing training on financial crime.
One of the most common pitfalls for financial institutions is relying on an off-the-shelf training programme. There are a plethora of ready-made AML training courses available which tick the box for meeting basic regulatory requirements; however their generic nature means they barely scratch the surface of what you really need to understand. In order to turn training into a key tool in reducing your risk exposure and an opportunity to develop, firms are advised to consider more bespoke options.
FINTRAIL designs and delivers bespoke training sessions tailored to individual firms’ risk profiles, products, geographies and sectors. Read on to find out why this matters…
The regulatory imperative
In many jurisdictions, financial service firms are obliged to provide financial crime training to their staff. In the UK, for instance, the Money Laundering Regulations set out specific requirements that regulated firms must meet:
Firms must ensure relevant employees and agents are made aware of the law relating to money laundering and terrorist financing, and the requirements of data protection.
Employees must regularly be given training in how to recognise and deal with transactions and other activities or situations which may be related to money laundering, terrorist financing or proliferation financing.
Each firm must take account of the nature of its business, its size, and the nature and extent of the financial crime risks it faces.
Let’s take a look at what the regulations actually mean in terms of who needs what financial crime training and when.
One size does not fit all
The UK regulations define ‘relevant employees’ as anyone capable of contributing to the prevention or detection of money laundering, terrorist financing and proliferation finance or the identification or mitigation of the risk of these activities. In other words, it’s not just the compliance team but also senior management and all sales teams, account managers and other customer-facing roles. These different roles clearly face varying levels of exposure to financial crime risks and have different levels of existing knowledge. As a result, financial crime training must be tailored to the specific needs of different employees’ roles and responsibilities.
Company-wide training: Every employee, from administrative staff to the CEO, should have a basic understanding of financial crime risks. Company-wide training often covers general topics like definitions of anti-money laundering (AML), fraud prevention, and raising concerns. This level of training helps establish a culture of vigilance and ethical behavior across the organisation.
Compliance teams: Those working in compliance or risk departments require in-depth training to ensure they can manage and monitor the firm’s anti-financial crime policies effectively. They need specialised knowledge of the firm’s obligations under applicable regulations, how to assess levels of risk exposure, how to fulfill KYC requirements and monitor customers’ behaviours, and how to report suspicious activity.
Senior management and board members: Senior management has ultimate responsibility for the firm’s financial crime compliance framework. It is therefore critical they understand their role in governance and risk oversight, and are well-versed in how to design, implement, and review an effective financial crime risk management program. This level of training should focus on high-level decision-making, understanding risk assessments, and maintaining accountability.
By customising training based on an individual’s role, regulated firms can ensure that everyone has the knowledge and tools they need to meet regulatory obligations and protect the company from financial crime.
It’s not all about AML training
Good financial crime training covers a wide range of topics. The UK Money Laundering Regulations specifically call out money laundering, terrorist financing and proliferation finance, but it’s also vital to understand sanctions evasion, fraud, and bribery and corruption risks amongst others. The depth of coverage required for each topic will vary depending on the firm’s operations, size, and risk exposure - i.e. different firms will require different training content.
Many firms are increasingly choosing to go beyond the main topic areas above, to look at specific topics of relevance to their company or where they have identified particular knowledge gaps. At FINTRAIL, we have produced and delivered bespoke financial crime training on:
Financial crime risks for cryptocurrency
Tax evasion
Terrorist financing risks for FinTechs
Tipping off
Financial inclusion
Far right extremism
Building a compliant product
Financial crime training isn’t a one-time exercise
Finally, the UK Money Laundering Regulations make it clear that it isn’t sufficient to provide training to new employees when they join a firm. Regulations change constantly, as do the financial crime threats a business faces, and the business’ activities and risk profile. Staff therefore benefit from regular training - both to reinforce key messages and keep information fresh in their minds, and to keep them up-to-date with new regulations and risks. For most firms, training takes place at onboarding, on an annual basis, and whenever there are significant changes to the regulatory environment or the company’s activities - e.g. if it expands into a new market or customer vertical, or begins offering a new product. Ad-hoc training can also be scheduled in response to identified knowledge gaps or areas of weakness.
Hopefully this close review of the regulations shows the benefits of individualised financial crime training programmes over off-the-shelf courses. Firstly, a bespoke approach ensures that the training is relevant to your company’s specific needs, operations, and risk profile. A generic programme may not address the unique challenges your firm faces, leading to knowledge gaps that could expose you to regulatory and operational risks.
Secondly, bespoke training can lead to better engagement from staff. When training is tailored to their specific role and challenges, employees are more likely to find it valuable and retain the information. In turn, this can improve their ability to detect and report suspicious activities, strengthening your firm’s defenses against financial crime.
Lastly, bespoke training programmes demonstrate to regulators that your firm is taking its financial crime prevention responsibilities seriously. By designing a training programme that reflects your firm's unique risk profile and operational environment, you show a proactive commitment to regulatory compliance and ethical business practices.
If you would like to speak to FINTRAIL to learn more about how we can help you with your training requirements, please contact us.
Examples of our financial crime training projects
FINTRAIL was engaged by Finance Latvia, the industry association representing all major banks in Latvia, to deliver a financial crime training programme to CEOs and board members of Latvian banks. The training included a focus on balancing a risk-based approach with consumer duty obligations, and avoiding unnecessary de-risking.
FINTRAIL has worked with the Centre for Financial Crime and Security at RUSI on various financial crime training engagements, including terrorist financing and AML training throughout Europe. Most recently we have developed targeted training on Russia sanctions reporting requirements and detecting sanctions evasion for financial sector audiences in the Baltics, Denmark and the Netherlands.
FINTRAIL provided board-level senior management training for a banking services provider, designed to increase senior executives’ awareness of risks while scaling the business, and how to adopt a proportionate business-focused risk appetite. It focused on financial crime risk assessments and risks related to downstream relationships, including an overview of controls and oversight of financial partners, as well as appropriate risk decisions.
FINTRAIL created and delivered three online AML training modules to staff of a European payments firm, focusing on suspicious activity reporting, transaction monitoring, and authorised push payment fraud controls. Each training module included exercises and case study examples to ensure engagement, and was bespoke to the client’s products and use cases. FINTRAIL was subsequently asked to develop further training to their team in Q3 of 2024.