11. A Trainer's Perspective: Key Topics to Cover (1)

Based on last week's post, we looked at some of the ways an AML/CFT class can be conducted for high levels of engagement, learning, retention and understanding.

Now we want to focus on what are some of the key topics we need to teach in order for the class to be equipped in their understanding of AML/CFT.

In general, I feel there are 3 basic areas that a bank needs to be adept in:

a. Performing quality Customer Due Diligence (CDD) to know sufficient about their customers in order to assess the risks in having said customers and then making informed decisions to accept the customer;

b. Performing Transaction Monitoring in order to compare what the bank knows about the customer (via CDD) against what the customer actually does in its banking activities;

c. Raising Suspicious Transaction reports to the authorities when there are discrepancies between what the bank knows about the customer (a) and what the customer actually does (b) that cannot be reasonably explained, which in turn causes the bank to be suspicious of potential Money Laundering / Terrorism Financing activity.

Today we will look at how we can teach various topics under Part (a) above, CDD.

1. Identifying and Verifying the customer

The most basic of topics, we highlight the need to obtain certain types of documents, sight the originals, make copies (or in this modern age, using biometric verification) and making sure the photo in the document matches our customer's appearance.

You may try: Sharing images of as many different types of documents that can be used to help in meeting this requirement and get feedback form audience on what else they have seen before. For example, passports, national registration IDs, military cards, etc

2. Risk Rating the customer

In order to manage the risks associated with AML/CFT, the bank needs to have in place processes to calculate the risk of any customer type and give a specific risk rating. Then the level of work done for CDD will be tiered accordingly, those with higher AML/CFT risk will be subjected to higher levels of CDD.

You may try: Prior to class, come up with a few flash cards, each card having the details of a customer profile, listing the details, some of which will help the staff decide if the customer poses high, medium or low AML/CFT risk. During class, pass the cards around and after some thinking time, get volunteers to the flip chart in front to risk rate the customer. All others can help give input

3. Obtaining information to substantiate the risk factors

The common factors used by organisations to identify the risk of a customer usually include: occupation/nature of business, country of residence, country of origin, net worth, and if one is a Politically Exposed Person (PEP) or not.

You may try: setting up a scenario where half the class prepare a volunteer as a customer and the other half prepare a volunteer to be a bank staff. Once set up, the 2 volunteers can sit on chairs across from each other in front of the room. As the interview takes place, remind the observers to take note on areas of strength and areas to improve. When over, congratulate the volunteers for a job well done. Then start the sharing session.

4. Politically Exposed Persons (PEP)

PEPs and their family members and close associates (Connected Parties) are seen to be of high AML/CFT risk, and therein lies the importance of correctly identifying them prior to on boarding into the bank. After that there needs to be special approval obtained prior to onboarding.

You may try: Before the session, gather a list of names and pictures of all kinds of well known people from across the globe. Then on the day itself, give one or two names to each of the participants and get them to guess / tell the class if those names are PEPs, are Connected Parties or neither. Ask them to share why, then discuss the answers as a group.

Next week, we will look at how we can teach various topics under Parts (b) and ( c ) above.