The MLRO’s Lot

Many firms are at risk by being under resourced within their financial crime function. MLROs are often expected to manage, single-handedly, a broad set of hefty responsibilities. And now with SMR a reality the role has become even more pressurised.

Larger firms have the scale to divide financial crime roles and responsibilities across teams, smaller firms often do not. It is typical in tier 3 firms that the MLRO is required to manage all financial crime functions: anti-money laundering, anti-bribery, data protection, fraud prevention, legal and regulatory compliance.

Where the MLRO carries such a diverse range of responsibilities there is a raft of conflicts to reconcile and the role of ensuring financial crime compliance becomes incredibly challenging. Simply staying abreast of the latest regulations, which are increasing in volume, velocity and variety, is challenging, let alone making efforts to maintain expertise in the latest techniques and tools that are used today to prevent financial crime. In addition, due to the growing burden of responsibility, the MLRO is required to operate day-to-day in a hands-on capacity, resulting in becoming less effective when needing to think more strategically. For far too long this has been the ‘MLRO’s lot’.

Out of this set of circumstances peer groups have formed and a proliferation of events and seminars have emerged, but even at their best these solutions are imperfect. They rarely provide the answers to the specific set of conditions an individual firm is grappling with. Some organisations partner with law firms who are expert at advising on legal exposure. Practicing lawyers however have rarely operated in controlled functions, CF11 or SMF17, and therefore they are unlikely to have the know-how and operational expertise to implement proportionate processes. Furthermore there is still no institute or recognised training body to support MLROs in their learning and development. It is not surprising that so many MLROs feel somewhat adrift.

SMR has also forced the Board to take more responsibility for financial crime prevention. In the past financial crime compliance might have been taken for granted but now senior managers need to be assured that their firms strategy and practice is sound.

Four Eyes is a new service from RFS financial crime which provides firms with a solution to these challenges; to help reassure MLROs and Senior Managers that they are doing the right thing. With Four Eyes MLROs can get cost effective access to an independent team of industry experts who get to know the specific set of challenges faced, make pragmatic assessments and suggest practical actions to guide MLROs through. MLROs can use the Four Eyes helpdesk service to seek advice in new areas or just to talk things through and get a second opinion. Four Eyes also offers regular on-site interventions. These are targeted at specific needs and act as bespoke learning and development sessions for the MLRO. This provides a demonstrable log of MLRO training which is often forgotten in a firm’s overall financial crime framework.

Click below to find out more about how Four Eyes could mitigate your financial crime risk.