Anti-money laundering: Online training can be a challenge
Many law firms treat anti-money laundering (AML) training as a “tick-box exercise”, the Solicitors Regulation Authority (SRA) has found.
The regulator also said that where money laundering compliance officers (MLCOs) had undertaken additional training, firms were around 50% more likely to be compliant.
The SRA said a recurring theme from the 13 training providers who helped it with its thematic review was “the large proportion of firms who still treat AML training as a ‘tick-box’ exercise” to be completed every year.
“Firms will approach training providers asking for a generic, one-size-fits-all AML training package. While these are useful, often they will not be specific to the risks the firm faces.
“Where training is too generic and not related to a firm’s specific processes, it’s unlikely a firm will see any change in their working practice.
“It is far better for training to be treated as an on-going exercise, and not something which is static and completed once a year.”
The SRA drew on information from nearly 400 onsite AML inspections between April 2022 and April 2024 for its thematic review of AML training. It also spoke with 65 of the largest law firms at a roundtable in January this year and met with a group of sole practitioners.
The regulator found that, of the 42 law firms in the sample that were non-compliant with one or more of the AML regulations, 19 were given direction on training and maintaining training records after their inspections, which suggested “a lack of training and poor records management can lead to other issues of non-compliance”.
With more people working remotely, many training providers highlighted “a shift away from face-to-face training and a higher demand for webinars or online training”.
While this could be “positive in terms of the costs and flexibility they provide”, online training could “present a challenge, as people may become distracted and can stop focusing” and “people are far less likely to ask questions during or following online training”.
To mitigate this, some providers “insisted on cameras being on when training is being delivered remotely” or combining online training with face-to-face delivery.
A further challenge came in the form of “cultural issues” involving a small number of fee-earners, particularly those with more experience, who feel they have completed AML training in the past and so do not need additional training.
The SRA said that while experience could help with identifying risks, the AML landscape was “constantly changing, and criminals are finding different ways to launder the proceeds of crime”.
“Another challenge providers often face is that firms are reluctant to sign up to regular AML training, as they see this as being repetitive and ineffective.
“While firms accept AML training is important, bad experiences in the past have made it difficult to get fee-earners on board. Keeping training relevant, engaging and up to date is the best way to overcome this.”
The SRA went on: “While most firms we inspected implemented some form of AML training, there were a small number of firms who had not.
“This was highlighted when we spoke to fee-earners at these firms, who were often unclear on key aspects of AML compliance, such as source of funds/source of wealth checks and enhanced due diligence.
“These are key controls fee-earners must be aware of to help protect against potential money launderers.”
The SRA said some firms also failed to keep a record of who had completed AML training, while others “failed to follow up with fee-earners who had not completed their AML training”.
As we reported yesterday, the SRA’s annual AML report found that only 22% of law firms it had checked for their approach to AML in the past year were fully compliant with the rules.
Leave a Comment