Infographic: Compliance Policies vs. Procedures
As we described in our Must-Have Compliance Elements post, there are five key pillars that form the foundation of any strong anti-money laundering compliance program:
Designation of a compliance officer
Development of internal policies, procedures, and controls
Ongoing employee training
Independent testing and review
Customer due diligence
Internal policies and procedures are important because they provide a framework for consistent decision-making and actions within your organization. They help ensure that everyone in your organization is on the same page, and that there is a clear understanding of what is expected of each individual. In addition, they provide guidance for how to handle various situations so your organization is ready if/when the time comes.
Well-written policies and procedures also help to ensure compliance with legal and regulatory requirements. By establishing clear policies and procedures, your organization can demonstrate to regulators and other stakeholders that it takes its responsibilities seriously and has appropriate measures in place to manage risk and ensure compliance.
Finally, policies and procedures can help to promote a culture of accountability and responsibility within an organization. When everyone is clear on what is expected of them and how they should act in certain situations, there is less room for misunderstandings, confusion, or non-compliance. This can help to foster a positive work environment, where employees feel empowered to make the right decisions and take ownership of their actions.
You may wonder: just what is the difference between a "policy" and a "procedure"? This infographic breaks down their key differences: