The regulators are determined to penalize banks and other financial institutions that fall behind in the struggle to comply with the updated anti-money-laundering (AML) regulations. The recent high-profile enforcement actions, fines, and penalties assessed by regulators against financial organizations with lax controls over money laundering have signified their determination.

Minimizing AML compliance risk in an era of mandated model risk management standards requires the regulated institutions to design, implement, test and improve their AML models on an ongoing basis. Many banks are currently applying AML models to customer risk scoring and customer due diligence risk. Most of them are equipped with automated transaction monitoring systems, cash aggregation and reporting systems, and watch-list filtering systems, all of which are considered as models under the guidance. All aspects of model risk management necessitate the regulated institutions to provide robust supporting documentation which can demonstrate to regulators and auditors that the AML models are effective and aligned to business and regulatory needs.

Given the complexities of the framework, CT RISK can assist the institutions in the deployment of a systematic and consistent approach to model risk management. What is more, CT RISK helps them to tackle the related documentation, quantitative analysis and tuning procedures that regulators have come to expect.