How to Build an AML Program: A Step-by-Step Guide

When Mark, a cofounder of a fast-growing fintech startup in the UK, realized his company needed to adhere to the Financial Conduct Authority (FCA) standards for KYB, KYC, and AML, he was overwhelmed. As his business scaled rapidly, the complexities of compliance threatened to slow down operations and erode investor confidence. Here’s how Mark built an effective AML program that not only met regulatory requirements but also became a cornerstone of his company’s success—all with the help of iComply’s innovative platform.

Step 1: Understand the Regulatory Requirements

Mark started by diving into the regulatory frameworks his company needed to follow. In the UK, the FCA’s stringent requirements on KYB and KYC processes set the standard. Mark also reviewed global guidelines from the Financial Action Task Force (FATF) and the EU’s AML Directives to ensure his company’s policies aligned with international best practices.

Mark’s Checklist for Understanding Regulations:

• Identify the specific regulations relevant to your industry and jurisdiction.
• Consult official resources from regulatory bodies like the FCA or FATF.
• Seek expert guidance or use tools that summarize complex requirements.

Step 2: Conduct a Risk Assessment

Next, Mark conducted a detailed risk assessment, analyzing his fintech’s customer base, transaction types, and geographic exposure. With iComply’s support, he categorized his customers by risk levels and identified high-risk activities requiring Enhanced Due Diligence (EDD).

Mark’s Checklist for Risk Assessment:

• Map out your customer demographics and transaction patterns.
• Identify high-risk geographies and customer profiles.
• Document risks and prioritize them for action.

Step 3: Develop and Document Policies and Procedures

Mark knew that robust policies and procedures would be the backbone of his AML program. iComply’s policy and procedure documentation tools helped him create clear guidelines for:

• Customer Due Diligence (CDD): Verifying identities and monitoring activities.
• Enhanced Due Diligence (EDD): Extra checks for high-risk scenarios.
• Reporting Mechanisms: Filing Suspicious Activity Reports (SARs) efficiently.

Mark’s Checklist for Policies and Procedures:

• Use customizable templates to address specific business needs.
• Ensure policies cover all required areas, from CDD to reporting.
• Review and update documentation regularly.

Step 4: Appoint an AML Compliance Officer

Mark appointed Emily, a dedicated AML Compliance Officer, who used iComply’s tailored training resources to hit the ground running. Emily took charge of:

• Implementing and managing the AML program.
• Acting as the primary contact for regulators.
• Ensuring the team’s adherence to policies.

Mark’s Checklist for Appointing an Officer:

• Select someone with expertise in AML and compliance.
• Provide them with authority and resources to act effectively.
• Offer ongoing training and support.

Step 5: Train Your Team

Mark’s entire team needed to understand their roles in compliance. Using iComply’s AML training modules, he ensured employees could recognize and report suspicious activities.

Mark’s Checklist for Training:

• Schedule regular training sessions tailored to job roles.
• Include practical examples of red flags and reporting processes.
• Update training materials as regulations evolve.

Step 6: Implement Technology Solutions

To support compliance, Mark integrated iComply’s platform into his operations. The platform provided holistic, integrated solutions to streamline and connect his KYB, KYC, and AML workflows. iComply provided:

• Policy and Procedures: Streamlined creation of up-to-date workflow documentation.
• KYB Automation: Onboard corporates and identify their directors, officers, beneficial owners, and other related parties.
• KYC Automation: Simplified customer onboarding, identity verification, risk scoring, refresh and reviews.
• AML Automation: Screen and monitor all clients and related parties in real time for new sanctions, political exposure, crime, money laundering and terrorist financing.
• Audit Support: Tools for managing records and preparing reports for reviews.

Mark’s Checklist for Technology:

• Identify gaps in your compliance processes that technology can address.
• Select scalable, user-friendly solutions.
• Test systems thoroughly before implementation.

Step 7: Monitor and Audit Regularly

Regular audits became a cornerstone of Mark’s compliance strategy. iComply’s platform helped him organize documentation and streamline audit preparation, ensuring a smooth process during regulatory reviews.

Mark’s Checklist for Monitoring and Auditing:

• Conduct regular internal reviews of compliance practices.
• Maintain a clear audit trail with organized records.
• Engage third-party experts for independent assessments.

Step 8: Foster a Culture of Compliance

Mark and his cofounders led by example, embedding compliance into the company’s values. 

Mark’s Checklist for Culture:

• Communicate the importance of compliance at all levels.
• Recognize and reward compliance efforts.
• Encourage employees to report concerns without fear of retaliation.

Step 9: Report and Respond to Incidents

When suspicious activity arose, Mark’s team acted quickly. This ensured prompt submission of SARs and effective incident resolution.

Mark’s Checklist for Incident Response:

• Establish clear procedures for identifying and reporting issues.
• Train staff on how to handle incidents.
• Review incidents to strengthen future prevention efforts

Step 10: Stay Current with Regulatory Changes

With iComply’s regulatory updates to their platform, Mark stayed ahead of new requirements. This proactive approach allowed his company to adapt seamlessly to evolving standards without the need for a big technical lift.

Mark’s Checklist for Staying Current:

• Subscribe to updates from relevant regulatory bodies.
• Participate in industry forums and workshops.
• Regularly review and update AML policies

Building Trust Through Compliance

Thanks to iComply, Mark transformed a daunting compliance challenge into a streamlined, cost-effective process. His fintech now operates with confidence, meeting FCA standards and building trust with customers, investors, and regulators. By following Mark’s example, you too can create an AML program that safeguards your organization and supports sustainable growth.