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Jan29 - 22

The Five Most Important Elements of an Effective Compliance Program 

Financial businesses are required to adhere to the Bank Secrecy Act and anti-money laundering compliance standards. At Bates Group, our anti-money laundering (AML) compliance specialists can help to evaluate your business’s risks, design a compliance program, and test and assess your compliance program. Here are five of the most important elements of an effective compliance program—

1. Risk Assessment

Designing an effective compliance program starts with assessing a business’s risk. A risk assessment can help you to identify and organize potential risks, and respond to threats accordingly based on the level of risk presented. The risk assessment should primarily take place during the planning and scoping processes of designing a compliance program. 

2. Detection of Suspicious Activity

Any suspicious or potential money-laundering activities must be quickly detected and acted on. As such, identifying suspicious activities and developing a process for recognizing them internally is key. Examples of suspicious activities include large deposits, fake data in applications, lack of information submitted in opening a bank account, etc. It is important that all persons in a company are aware of the full list of suspicious activity and know how to respond when suspicious activity is detected. 

3. Independent Testing

A mandatory part of AML compliance is that of independent testing and audits. The purpose of a third-party, independent audit is to ensure that any weaknesses and gaps in a compliance program are identified and can be corrected. Keep in mind that it’s not enough to merely conduct independent testing, though; reviewing the results of an independent audit and implementing changes where necessary is also critical. 

4. Ongoing Training

All staff who come in direct contact with clients or work in high-risk departments should receive ongoing training about AML compliance and a company’s specific compliance program. In addition to reviewing internal policies, reviewing the consequences of compliance failure, including AML penalties, is also recommended. 

5. Reporting

There should be a robust reporting program in place as part of your compliance program. Suspicious activity should first be reported to management, who will then make a decision about next steps based on the evidence. 

Get Help Designing Your AML Compliance Program

At Bates Group, our consultants specialize in AML compliance. For help designing, implementing, or testing an AML compliance program, please call our team directly today. We are a trusted name in the AML compliance industry and can provide AML independent reviews, training, policy and procedure development, consulting services, and more. Connect today to get started. 




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