The Solicitors Regulation Authority (SRA) criticises law firms for treating anti-money laundering (AML) training as a mere ‘tick-box exercise.’
- Firms using generic AML training packages may not address their specific risks, leading to ineffective compliance.
- Enhanced training for Money Laundering Compliance Officers can significantly improve compliance rates.
- Online AML training sees increased demand but presents challenges in engagement and interaction.
- A considerable number of law firms fail to maintain adequate records of completed AML training, affecting compliance.
The Solicitors Regulation Authority (SRA) has voiced concerns over the approach of many law firms towards anti-money laundering (AML) training, describing it as a ‘tick-box exercise.’ Firms often opt for generic training modules that do not consider the unique risk profiles they face. This method contrasts starkly with a tailored approach, which could lead to substantial improvements in working practices.
Further findings indicate that law firms where Money Laundering Compliance Officers (MLCOs) undertook additional training showed approximately 50% higher compliance rates. This highlights the importance of more rigorous and targeted training regimens.
During its thematic review, the SRA collaborated with 13 training providers, revealing a significant reliance on generic, off-the-shelf AML training packages by firms. Such packages, while convenient, fall short of addressing firm-specific requirements, undermining their efficacy.
The transition to online training, exacerbated by an increase in remote working, has been both beneficial and challenging. While cost-effective and flexible, these formats risk reduced engagement. To counteract this, some training providers insist on active participation through video during remote sessions.
A noteworthy issue identified was firms’ poor record-keeping related to AML training completion. In many cases, this led to broader compliance failures. The SRA’s inspection of 42 firms found that inadequate training documentation was a recurrent problem. Across its inspections, only 22% of firms demonstrated full compliance with AML regulations.
The SRA’s findings underscore the need for law firms to adopt more effective and bespoke AML training methodologies to ensure compliance.
