Beating the paradox

The risk of an under resourced financial crime team are real and increasingly visible. The risk of becoming an isolated resource not only puts the financial crime professional at risk, it also increases a company’s financial crime exposures.

Times are tough for the financial crime professionals in the regulated sectors. They are facing those challenging times where things simply do not make sense. The economic downturn has provided financial crime teams with a large number of challenges. On the one side more frauds get uncovered, because the underlying ‘business model’ turns out to be flaky in economic downturns and many employees and clients are prepared to cut a few corners here and there to ensure that revenues stand up. On the other hand the team faces pressure from senior management, ‘I know it’s important what you do, but we have bigger issues to deal with now’. Further pressure from the front and back office, to allow a few things through because income is king, and finally additional pressure from HR: If you are not a revenue generator, you will have to cut back.
This is the paradox facing today’s financial crime teams. You have arrived back where you were a few years ago, the lone financial crime fighter in a regulated world where costs are driven down to an absolute minimum, and where the clients need to get squeezed for every penny and you are seen as a cost centre. The only difference is that your job is so much more complicated than it used to be.

It’s getting worse, because of all the reasons above governments and regulators are suddenly stepping up and starting to do what they should have been doing when the markets were doing well. Just now when the economic climate turns against you, they start regulating and supervising. Led by an enthusiastic Mr Obama, politicians internationally are stepping up making strong statements about increased financial sector regulation and ‘outlawing’ offshore tax havens. We obviously all know that this hindsight management is politically essential, but right now the MLRO could do without increased regulatory pressure.

So, what’s next for the isolated MLRO? Where do you go for a second opinion? Who do you speak to when faced with something you have not come across as yet? There is a plethora of options available: networking round table discussions, conferences, blogs and online forums are cheap or even free, but obviously unreliable. Off the record chats have their value, but you can’t put it into any report where you justify your decision. It never looks good when you back up a decision with the fact that user Blackbelt126 agreed with you on this one.

Or contact a professional services firm. Leave a message, get someone to call back, have a meeting, decide what should be done, receive a proposal, make a purchasing decision and then realise that purchasing procedure requires three quotes before you can agree anything.

This is why we developed MHA Gateway, a no nonsense, fixed price support resource, that is always there, ready and waiting, and jam packed full of templates, drafts, tips and guidance as well as a help desk, all designed to help out the financial crime professional balance time and budget whilst maintaining a risk management framework that stands up to scrutiny.

The simple fact is that many consulting engagements don’t actually require consultants. Often you just need a hand, or a pointer in the right direction, with or without a template you can use as a starter for ten. You should try MHA Gateway sometime.