Banking and compliance: How I scooped an award for my work
23 Jan 2019

Someone asked me how I won an internal award or recognition for my compliance work at the bank where I worked, and I am pleased to share my little adventure.

My tale goes back to when I arrived at the glossy reception area of a smart block of offices.

It was the first day of my corporate life, joining the Bangalore office of a German investment bank headquartered in Frankfurt and I was going through a mix of emotions — nervousness, excitement, and maybe apprehension too.

I was joining the global markets team as a KYC analyst. For the interview I had prepared myself by referring to various materials online, however, I wasn’t quite sure of what KYC was in detail and how it is performed in such a big organisation or what was expected out of me as a KYC analyst.

After a short while, the HR person came down to meet me and introduced me to my manager, who was happy to welcome me to his team.

He made sure that I felt comfortable on my first day and introduced me to the rest of the team.

Later that day, I had a discussion with him and asked him what was my role as a KYC analyst, with a heavy voice he replied that it was to primarily review documentation for new and existing customer accounts, evaluates high-risk accounts and escalate any deviances to compliance as and when necessary.

I was honest and explained to him that I didn’t know much about KYC and AML, however, I was very keen to learn.

I assured him that he would see measurable results in a short span of time and I would prove to him that I had the capabilities to effectively contribute to the organisation.

New kid on the block

My manager believed in training on the job rather than classroom sessions, which was exactly what I was looking for.

So on the next day I was assigned a buddy to train me on the concepts of due diligence. He provided me with a document that ran into 300+ pages called CDD Policies and Procedures and I was asked to go through certain important portions of it and raise any doubts, if any.

And that’s how my journey to the world of AML KYC started!

One of my experienced team members suggested to me that I first read through the types of entities that exist and try and understand the basic differences between each of them, which would help me in the long run.

For example, the principal differences between a listed corporation and a privately held enterprise, or how a trust was different from a foundation. He also advised me to keep reading a lot about various governing bodies, such as the Financial Action Taskforce (FATF) recommendations or any regulatory updates.

Learning the ropes

And then I moved on to one of the most important concepts of KYC – the risk assessment.

I would see a lot of seniors on the floor discussing risk rating and I would tell myself that I should never mess up on risk judgment when I hit the operation floor.

I kept a checklist for myself on the factors that I need to look into while calculating the risk rating of a customer and which has helped me in the past and helping today as well, few of these include below (but limited to):

  1. Geography
  2. Type of entity
  3. Line of business
  4. Profiles of people involved
  5. Sanctions
  6. Adverse news

For the next two weeks, I went through various documents and shadowed my seniors to see if my understanding of the subject matched with what they were performing on the ground, and eventually, my big day came in the third week of my joining where I was given a client to review all on my own.

Smashing through

My aim was to apply all my learning’s on this review and come out with 100% accuracy, it was a private limited company incorporated in the United Kingdom, and while performing the due diligence I was simultaneously calculating the risk score which in this case was low risk.

I made sure to document all the research performed to support my decisions.

I achieved a quality score of 100%!

Since then, there was no looking back, and within a short span of three months I moved from reviewing low-risk clients to high-risk clients with immense accuracy.

I found that latching onto the KYC role was a real eye-opener into the interesting world of AML and financial crime compliance. It demanded commitment to read and understand topics, and at times I felt led to go the extra mile to accomplish certain tasks. I hungrily delved in!

I also developed admiration and respect for my colleagues.

I tell you, we had some very sharp minds in our department, and they could expertly tackle some pretty complex issues.

In no time at all, I realised I was beginning to really enjoy my work. The harder I worked and more I learnt, I found my output improving hugely more and more each month.

I guess you could say I became passionate about AML and KYC.

Ok folks, the special moment …

One evening, when I was having a coffee with some of my team members, my manager called me on my mobile and enquired where I was.

He asked me come to the meeting room immediately and there I was thinking stuff like: What’s happened? Why is he calling me? Did something go terribly wrong with any of the CDD profiles I reviewed? Is there any escalation from onshore?

When I went to the meeting room with a sense of fear my manager announced that the management had decided to award the Star of the Month to an individual from our team.

And I was wondering who the bright winner was, some names were running through my mind but a strange thing happened: the manager walked up to me and shook my hand.

“Well done Suresh, your hard work and fantastic compliance results have not gone unnoticed,” he said, explaining that I had won the bank’s Star of the Month award.

My colleagues congratulated me – a brand new compliance officer – for scooping a pretty cool award.

Looking back, there were some factors that I believe helped me improve my compliance work and become great at KYC.

Here’s some:

  1. Document all the new web links and research – make sure that you save all the weblinks that you feel are a reliable resource for locating information, for example, save the companies house or registry links for various countries, this will help you in retrieving information faster and record all the research performed that helped in taking a decision for future audit.
  2. Understand each entity type in detail – to gather information on entities you must first know what information to ask or look for, and this can only be achieved if one understands the various parties involved in a particular type of entity. For example, one needs to know that a trust doesn’t have a board of directors, it has trustees and this information can be generally found in the trust deeds. So what to ask for and where to look for it is really important.
  3. Thinking Cap – KYC is far more than just ticking boxes, performing KYC requires the analyst to always wear the thinking cap, as there is a lot of judgment involved in the process. To mitigate a risk factor one has to look at various aspects, for example, if the trading counterparty of your client is from a high-risk country and the volumes are low then the high-risk factor can be ignored provided there aren’t any other risk factors, so the thinking aspect is critical.
  4. Keep yourself updated – regulations keep changing at a fast pace, and hence it is important to catch up on these requirements. In 2017,  the EU Fourth Anti-Money Laundering Directive (4AMLD) came in with lots of changes such as the removal of applying simplified (SDD) to a certain category of customers automatically, member states creating a directory of beneficial owners and expanding the definition of politically exposed persons (PEPs) to include domestic PEPs. Hence it is really important to understand the changes and apply those aptly.
  5. Be open to learning – the world is changing; automation is taking over by storm. A lot of tasks in KYC that are manual in nature are being automated, such as reviewing the false positives, and this needs functional domain experts to work with the technology team to get the work done. Hence it is important to be open to unlearn and relearn to match the changing times.

To summarise I would advise being thorough with concepts, build confidence and learn on the job, the mantra is “Stop-Think-Validate-Move.”

Could you win an award for your compliance work?

Here’s wishing you all the best.

About the author: Suresh Chavali is a subject matter specialist in the risk and compliance sector, focusing on know your customer (KYC), risk management, money laundering and terrorist financing schemes and trends. He has worked for various firms, including Barclays and Deutsche Bank.

This article is expressing personal opinions and is meant for information purposes only. The article does not intend to replace professional or legal advice. It is recommended that readers seek independent professional or legal advice, or speak to authorised persons/organisations.

Read more:

The perfect AML programme: A ten point guide

Anti-money laundering in 2018: Spectacular failures, hot money and, oh dear, the banks!

UK: HMRC announces Top 10 prosecutions of 2018

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