Written by Allan Clare on Friday November 19, 2021
Throughout my career there were often times, usually when operating in crisis management mode for prolonged periods, when I would ask myself: ‘Of all the jobs in financial services, why did I choose to be an MLRO?’ My answer was always immediate, consistent and concise: ‘Because I love it!’
Being an MLRO, with the regulatory accountability and responsibility for a firm’s financial crime programme is, in my opinion, the most exciting, challenging and rewarding job in compliance and risk management. This is something I’ve never been shy of sharing and, though I know that I am biased, fellow MLROs will know that once you’ve tried it, it’s addictive.
I think it was the unexpected challenges and variety of activities that kept me hooked. Every day was different and unpredictable, while still rooted in a reliable routine with regular tasks and responsibilities such as team and governance meetings, risk and control assessment reviews and functional leadership responsibilities. Nonetheless, the flexibility to respond to urgent issues makes the role incredibly exciting and changeable – whether relating to suspicious client behaviour, sensitive client selection/exit decisions, complex business deals, product and technology innovation or indeed the consequences of an IT system outage that impacts the financial crime control environment.
Working with law enforcement agencies is also a key part of an MLRO’s work. It gave me and my team a real sense of purpose to support ongoing criminal investigations, often providing the missing piece of the jigsaw to law enforcement through 24/7 account monitoring or urgent real-time assistance on ‘crime in action’ cases. Supporting public-private partnerships to combat economic crime was also a significant aspect of the role, involving both intelligence sharing and best practice collaboration.
As an MLRO I always had an overwhelming feeling that the work we were doing to combat financial crime was invaluable to the bank, our customers and staff – as well as the communities that we served – therefore contributing, if only in a small way, to make society safer.
Personally, the opportunity to design, develop and in some cases fundamentally change a firm’s financial crime programme really appealed to me. In any role, you are merely a custodian for a period of time until you hand over the baton to your successor. The chance to therefore leave behind a legacy by improving a firm’s financial crime programme, positively impacting its capability, systems, controls and processes is a great privilege.
All this said, being an MLRO is not a role for everyone. At times it can be a pressurised and lonely environment, with your judgement and decisions being scrutinised and questioned by business heads, c-suite, boards and regulators. However, I’ve always believed in the mantra of taking and evidencing ‘reasonable steps’ in the execution of my accountabilities. It’s critical to demonstrate the rationale for your decisions through good record-keeping and governance. While hindsight is a wonderful thing, being able to show exactly why I did or didn’t take a specific course of action, based on all the facts available at the time, has been the best way for me to approach this role’s high level of accountability. To help me with my decision making, I also ensured that I surrounded myself with technical experts capable of providing me with sound advice upon which I could make well-informed decisions.
However, I couldn’t just rely on those around me. It’s also essential to have a sound technical knowledge of the subject matter, gained for example through financial crime advisory experience or qualifications but ideally both. The learning doesn’t stop there: keeping up-to-date with legal, regulatory and industry developments is a must.
Although being an MLRO requires regulatory approval and comes with significant responsibility, I’d encourage prospective MLROs not to be put off. It can be tough, but it is also exciting and fulfilling with many opportunities for personal and professional development.
I’ll conclude where I began, with the hypothesis that the MLRO is the best job in compliance and risk management. Long live the MLRO!
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