Comment: How professional enablers can mitigate risk and combat money laundering

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Michael Harris comments on the latest Office for Professional Body Anti-Money Laundering Supervision (OPBAS) report, investigating themes and progress within the legal and accountancy sectors in 2019, and considers what this means for regulators and financial services.

Professional enablers, such as law firms, accountants and Trust and Company Service providers, have an important role as the "gatekeepers" in protecting the UK from the impact of financial crime. These firms are as important as ever in the present crisis to defend against money launderers. 

The latest OPBAS report makes it clear that some progress has been made within these firms in terms of understanding and awareness of their obligations. According to the report, during 2019, most PBSs (Professional Body Supervisors) provided greater anti-money laundering guidance and training to their sectors and a much greater level of intervention than ever before. 

Each supervisory body now also knows who they are supposed to be supervising, which was previously noted as a major concern in the first report 12 months ago.  

Despite these improvements, there is still a long way to go, with the report identifying a number of areas where further improvements are needed. Firm that are supervised by PBSs still need to adopt a more risk-based approach in on-boarding and managing existing clients, as conducting thorough risk assessments of new and existing client relationships is vital to identifying potential financial crime risk.  

Perhaps most importantly, the report found that there is still very little intelligence and information sharing going on among all of the PBSs.  LexisNexis Risk Solutions has conducted independent research on several occasions in recent years in its ‘Future Financial Risks' reports and consistently found that risk professionals identify ‘better information sharing' as key to improving the fight against financial crime. 

Additionally, the report found that over the last 12 months, 2 in 5 respondents identified professional enablers as a threat they have been exposed to, and over a third (37%) felt this is likely to increase in the next year.  

Overall, it still has to be questioned as to whether the multiplicity of PBSs, although under the wing of the FCA, is the best way to continue or whether it would be more efficient and effective if they were replaced by a single regulatory body responsible for all professional sectors that are AML regulated. 

Michael Harris is director of financial crime compliance at LexisNexis Risk Solutions

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