IDEAS home Printed from https://ideas.repec.org/a/aza/jfc000/y2020v3i4p318-324.html
   My bibliography  Save this article

Conduct risk in anti-money laundering: Implications of when financial institutions get it wrong

Author

Listed:
  • Allen, Heather

    (First Vice President, BSA Officer, Peoples Bank North Carolina, USA)

Abstract

The world of AML compliance is not traditionally viewed as a hotbed of potentially unmitigated customer conduct risk. The Federal Financial Institution Exam Council (FFIEC) BSA/AML Exam Manual contains a directive for examiners to review a bank’s policies, procedures and processes related to account closure. What the manual does not provide is any guidance on how this closure process should be handled. In reading this manual, it is apparent that this common AML practice affects more than the customer’s perceived AML risk exposure. In some cases, taking a conservative approach to AML risk management could unwittingly expose one to unrecognised customer conduct risk. This paper analyses the potential consequences to financial institutions when they fail to recognise and mitigate the customer conduct that is present throughout the customer lifecycle.

Suggested Citation

  • Allen, Heather, 2020. "Conduct risk in anti-money laundering: Implications of when financial institutions get it wrong," Journal of Financial Compliance, Henry Stewart Publications, vol. 3(4), pages 318-324, June.
    • Handle: RePEc:aza:jfc000:y:2020:v:3:i:4:p:318-324
    as

    Download full text from publisher

    File URL: https://hstalks.com/article/5648/download/
    Download Restriction: Requires a paid subscription for full access.
    File URL: https://hstalks.com/article/5648/
    Download Restriction: Requires a paid subscription for full access.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    customer conduct risk; AML; risk management;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K2 - Law and Economics - - Regulation and Business Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aza:jfc000:y:2020:v:3:i:4:p:318-324. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Henry Stewart Talks (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.