Some thoughts on AML training

Hi All,

I've just posted the response below to a question on annual AML training that was posed in the Compliance Professionals - Saudi Arabia discussion forum on LinkedIn. So thanks to Naji Osman for his gracious permission to cross post this.

The key point that I wanted to get across is that the there is no one correct answer to the conundrum of what is best practice in AML training, rather it should be what works for your organisation!

Your feedback on my views is welcome.

"If I could take this training question from different point of view (pov) say from a senior management pov, an MLRO's pov, a back office and a front office pov all of which are subtly different, although occasionally aligned.

Senior Management want to know whether the training undertaken is effective in complying with the regulatory expectations of the firm without being an unnecessary burden to the bottom line, in other words do we comply? They like to try and master what they see are the key risks to the firm, what can be done to manage the immediate higher risks within existing resources, what risks need to be covered by new resources (additional staff, new computer system etc) and what can be delayed and put into a project management tool and what they can safely ignore.

An MLRO tends to want to prove that all or all relevant staff have been trained that year and that they understand what the training is trying to do for them, see Naji’s excellent points about Accounts and understanding what it means for their day to day job. MLROs will also tend to deliver the training (professional development) to their own senior staff so that they can be sure what key concerns senior managers may have. Now an MLRO might also try and establish a common approach from the Board (if possible) so that a common culture of what is expected from people in the business can be established. A useful but difficult aim to achieve sometimes.

Back Office tends towards looking at how this training will be relevant to them and how it will affect their current systems. By way of an unscientific observation, they tend to look on face to face good quality training as a perk and they tend to more easily grasp some of the more unpleasant what if scenarios that AML training can generate. Some of the best SAR’s I have seen generated have come from back office staffs that have picked up expected third party payments, unexpected currency settlements etc.

From Front Office (here follows a massive generalisation) its does this stop me earning money? If it does can I shovel the responsibility elsewhere eg to client on boarding for KYC completion etc. If a firm wide culture has o not been established (with senior management on board) this is where you can run into some resistance if you are not careful.

Re types of training, for large complex firms Computer Based Annual Training is the only sure way of establishing and proving through effective audit trails that AML training has been done. It is also very easy to introduce annual competence tests built on questions answered correctly. Advantage is that is transparent easy to monitor and can be update in a uniform way. It is easy to repeat annually.

Disadvantages can be:
 high degree of initial cost in ensure content is relevant to a firm’s actual activities and AML risks,
 People can pass with strong marks but fail to understand what the training is telling them.
 DVD’s aimed at banks don’t go down well with Asset Managers.
 Can be expensive to refresh to keep it relevant as the firm and the markets that they operate in change.

Re bespoke face to face training the advantages tend to be:
1. High degree of relevance to the firm and the particular group you are training
2. A greater degree of interactivity with, if your trainer has the right experience, the ability to answer the vast majority of questions raised there and then.
3. Should be easy to incorporate relevant developments over the last 12 months.
4. If repeated annually you develop a greater degree of trust which enable she delivery of more challenging / demanding AML requirements over time. E.g. With a number of my clients they now look forward to their annual training and they no discuss some very sensitive issue from an AML compliance pov in a way they didn’t say 2 years ago.
5. If you mix in senior management, back office front office into different groups and the MLRO attends all the training, some of the discussions are a real eye opener.

Tip to my mind, the mark of a good trainer that has got the message trough is that the firm’s MLRO will find that they receive a greater number of queries and questions / phone calls from their colleagues following the training discussing AML risks. If your trainer is delivering this you may want to consider why not.

Disadvantages;
 Cost per head can be prohibitive.
 Proving that trainees have reached sufficient level of competence i.e., some of the training would probably be devoted to tests
 Some people don’t do well in face to face training and are better with PC based.
 Senior Management sometimes do not want to show their firm members what they do and don’t know.


Some firms now use a combination of both types of training (e.g. I’ve written CPD content for some firms whilst supplementing it with selected high level training for senior managers before role out) others favour one over the other."