Building a Compliance Program¶
Definition¶
How financial institutions build and maintain an effective KYC/AML compliance program — covering organizational structure, policies, training, monitoring, and audit.
Compliance Program Components¶
| Component | What It Includes |
|---|---|
| MLRO/CCO | Designated Money Laundering Reporting Officer / Chief Compliance Officer |
| Policies & procedures | Written KYC/AML/CFT policies, approved by board |
| Risk assessment | Enterprise-wide ML/TF risk assessment (updated annually) |
| Customer risk rating | Risk-based approach to CDD levels |
| Training | Regular AML/KYC training for all relevant staff |
| Independent audit | Annual independent review of compliance program |
| Screening program | Sanctions, PEP, adverse media screening procedures |
| SAR program | Suspicious activity identification, investigation, and filing |
| Record keeping | 5-year retention of all KYC and transaction records |
| Technology | eKYC system, transaction monitoring, screening tools |
Key Takeaways¶
Summary
- Every financial institution needs a documented compliance program — regulators audit it
- MLRO/CCO is legally required and personally liable in most jurisdictions
- Annual training for all customer-facing staff is mandatory
- Independent audit provides assurance that the program is effective
- eKYC technology is a tool within the program — not a substitute for the program itself