What are best practice controls in AML?

Best practice controls in Anti-Money Laundering (AML) refer to recommended measures and processes established by industry experts and regulatory bodies to effectively prevent and detect money laundering activities. This concept is grounded in the understanding that robust controls not only enhance compliance with legal requirements but also strengthen the overall integrity of the financial system.

Implementing these best practice controls typically involves a range of strategies, including thorough customer due diligence, transaction monitoring, and establishing strong reporting mechanisms for suspicious activities. Such measures are continuously updated and refined based on evolving threats and changing regulations, ensuring that institutions are prepared to identify and respond to potential risks associated with money laundering.

In contrast to best practice controls, outdated practices from previous years, suggestions from non-experts in the field, and unmonitored informal compliance methods do not reflect the current standards or expectations within the industry. Outdated practices may lack the necessary rigor and responsiveness to modern AML threats, while non-expert suggestions may not be founded in practical or regulatory realities. Similarly, informal compliance methods can lead to gaps in oversight and accountability, ultimately undermining the effectiveness of an organization’s AML strategy.