More than a few things have changed in banking since farmers and traders instituted grain loans circa 2000 BC. Today’s banking industry is often so diversified that complex processes and safeguards have been developed, sometimes haphazardly, to ensure legitimacy and prevent fraud and money laundering.

Over time, complex processes have a tendency to become overcomplicated. Before you know it, “business as usual” becomes all-consuming and costly. One review becomes two, multiplying over and over until redundancy becomes infused with a “how we’ve always done it” mentality for processes and controls.

Think about your current processes and answer this: how many people within your financial organization are involved in collecting data, reviewing and approving anti-money laundering (AML) and other regulatory compliance efforts? How long does it take to handle a typical internal review or audit? Can you keep pace? Do you have enough resources to handle growing case loads?

At Alacer, we’ve used Lean Kaizen techniques to help financial institutions find ways to successfully battle the increased demand for oversight and risk management. With the right facilitator, it’s not uncommon to reduce process time by as much as 50%, just by taking a thoughtful step back to review existing workflow and developing a plan for continuous improvement.

The key to ongoing Lean Kaizen success is being proactive and diligent. Getting started can be daunting as constraints, excess and waste accumulate with more red (no-value) than green (value) designations. Don’t get discouraged. The AML function is complex. Stay focused on reducing costs and increasing effectiveness. The resulting savings can be reapplied to meeting growing case loads without adding staff or resources (or incurring costly fines and penalties).

By Richard Paxton

Want to learn more?  Alacer’s AML experts will be attending the 19^th Annual AML & Financial Crimes Conference, being held March 16-19 at the Westin Diplomat in Hollywood, FL.  Send an email to me at Richard@alacergroup.com to arrange a chat.