AML Compliance: Big Job Market, Big Hurdles

I need someone who is comfortable in the regulatory jungle.

For those attracted to a career of hunting down criminals, law enforcement isn’t the only choice.

Finance has always been both a juicy target and a obvious tool for white-collar criminals so Wall Street’s focus on anti-money laundering compliance has been years in the making, but it wasn’t until after the 2008 to 2009 financial crisis that regulators intensified their efforts on financial crime, putting increasing pressure on financial institutions to police their customer bases. Enforcement actions stacked up.

The result is a booming market for anti-money laundering employee recruitment in small and large institutions alike. A quick look at online help-wanted columns will show JP Morgan, Citi, Standard Chartered and BNY Mellon are on a hiring spree and they are not the only ones concerned they will be next in line for a mega fine for not catching the flow of money tied to suspected terrorist activities, drug lords and others, organizations. With just a few years of experience a base annual salary of US$65,000 to US$85,000 is common. With up to ten years of experience, that could rise to US$150,000. A top-C level spot could command over US$1 million, not including bonus.

That’s the good news for job seekers. Now comes the bad cold reality: Applicants shouldn’t assume the capturing an AML job is easy. “The old Catch 22-saying that you need experience to get experience applies,” says Jack Kelly, managing director of Compliance Search Group in New York, specializing in executive compliance positions. “Ideally, the candidate should have equivalent, if not identical experience. Even so, he or she should expect to do a lot of social networking and knock on doors for quite some time.”

Besides being hard to get, AML-related positions are not as glamorous as they might appear. Not everyone is cut out to roll up their sleeves and do the detail-oriented, often repetitive tasks necessary, AML recruiters tell FinOps Report. Those working in the field often complain of being ill-trained and overworked.

Preventing money laundering isn’t a single task, but a multitude of functions which depending on the size of the bank or broker-dealer may be spread out over multiple departments. They include client onboarding, transaction monitoring, investigations, policies and procedures, and technology. As is the case with all types of jobs, employers tend to look for applicants with specific AML background in just one of these areas.

What It Takes

Client onboarding is the broad term referring to finding all the details about a new customer and rating just how risky the individual or institution might be. The rating analysis is based on the type of account holder, the types of account, the country of residence and source of the monies. Transaction monitoring refers to the subsequent ongoing surveillance of account activity to catch infractions such as suspicious patterns of cash deposits or fraudulent funds transfers. Should an account be flagged by a transaction monitoring system, an investigation would then take place to see if the warning is valid or a false alarm.

Recruiters say that financial firms are particularly rigorous when hiring investigative positions. “As is the case with all AML positions, having the identical role at another firm will be your best bet. Short of that, regulatory agency or law enforcement experience will be the next best,” explains Christian Focacci, founder of AML Source.com, a New York based AML career website and managing partner of New York-headquartered AML technology firm TransparINT. The reason: they will be mostly likely to be trained in recognizing the warning signs for criminal activity, as well as knowing what the regulators and others expect when it comes to how white-collar criminals should be tracked down.

For those who do not have specific background in the AML market, trying for a lateral move within the same organization could well be the only approach. “I would advise a prospective candidate from another unrelated industry who wants to work in the AML space to get a job in a financial firm first and then apply internally to transfer to an AML position once in the door,” says Aaron Kahler, managing director of AML consultancy and placement firm, AML Compliance Advisors in New York. “Such a step would allow the individual to show some knowledge of the financial services industry and compliance tasks.”

One potential plus: having one of several certifications in financial fraud. The most most recognizable are CAMS, Certified Fraud Examiner and a newer certification from the Association of Certified Financial Crime Specialists (ACFCS), explains Kahler. Short for certified anti-money laundering specialist, CAMS certification is limited to AML functions. By contrast, the certified financial crime specialist certification offered by the ACFCS trade group is broader-reaching also focusing on fraud and financial corruption. Offered by the Washington, D.C. American Bankers Association, the Certified Regulatory Compliance Manager (CRCM) designation is considered the most difficult to obtain and if often recommended for chief compliance officers whose functions might also cover AML.

For those interested in a role in policies and procedures, a background in compliance or law would be ideal as the job would be require translating complex regulations into understandable rules employees could follow. Most of those working in this category would likely also have completed stints in customer onboarding and transaction monitoring. In the case of AML technologists, degrees in computer science with experience installing systems using UNIX Windows, SQL scripting and revisions and configuration management will come in handy; experience in the AML space would be ideal.

Climbing the Ladder

What about those who want to climb the ranks to the top-level positions in AML — typically chief AML officer or global head of AML compliance? Obviously the bar will be higher. In addition to AML experience, an MBA if not a law degree will likely also be required for a strong analytical foundation and the ability to absorb ever changing regulations.

Directors of anti-money laundering activities at US representative offices of smaller foreign banks might be able to forego such rigid credentials by simply having worked in either AML positions or other compliance roles, or even operations. But there will be little room for advancement to their larger higher-paying US peers. “Large global financial institutions prefer to recruit specialists from their largest competitors rather than generalists who focus on multiple compliance tasks,” one AML director at a branch office of a country-specific non-US financial institution tells FinOps. “In the home office, we are often considered not as well-trained even though we may be actively involved with multiple AML functions as part of our overall responsibilities.”

Likewise, executives in AML roles at large global organizations could easily find themselves pigeon-holed into specific business lines or functions, making it difficult to transfer to other AML positions, says the same AML director. “The larger the firm the greater the chance that AML executives are dedicated solely to a specific business unit or to only one of several AML tasks. This kind of position offer deep experience, but not enough career-building interaction with other AML units or business lines.”

Credentials aside, keeping a job in an AML compliance role isn’t all that easy. It takes far more than simply being able to push paper. “Keeping correct documentation is just the tip of the iceberg in what is required,” says Focacci. “Know your customer specialists must be knowledgeable in all of the requirements for account opening, maintenance and monitoring of changes, while transaction monitoring specialists have to be able to decipher whether a warning of potential wrongdoing is valid so that a case can either be dismissed or escalated to the investigations area.”

Doing either job requires meeting the financial firm’s compliance “quota”  for the number of  accounts which must be opened and monitored daily and the time frame it will take. Anywhere from a handful of accounts to several dozen could be involved. “AML specialists can’t count on working at a leisurely pace,” says Kahler. “One of the key reasons large bank are hiring specialists, aside from regulatory scrutiny, is increased business volume.” As a rule of thumb, transaction monitoring specialists are given about forty-five minutes to review a new AML alert to decide whether a further investigation is necessary.

For those who want to move up the ranks, education and experience alone won’t cut it. Good negotiating and project management skills are a requirement for success. C-level AML officers interact on a regular basis with a diverse number of business lines, which may or may not have their own AML experts. Such communication typically consists of information about regulations which should be followed as well as discussions about how the policies and procedures of the firm match up to those requirements. While consistent policies and procedures are the foundation of any AML program, getting buy-into the gameplan  by diverse business lines may involve some tweaking.

That isn’t all the internal politics involved with the senior AML position. Compliance has to fit into the the firm’s roverall evenue-generating requirements and cost-controls. In addition there is the not so small matter of personal liability in regulatory enforcement actions if something goes wrong. Excuses such as saying they did their best to notify senior management of potential problems isn’t good enough for the regulators, as evidenced in recent cases involving Brown Brothers Harriman and BNP Paribas, 

Bottom line: “It takes a lot of sweat and a strong stomach to be in the AML compliance business,” one AML director tells FinOps. “If you just want to collect a paycheck or think catching criminals is always exciting work, you’re definitely in the wrong job.”