What is an Independent Internal AML Audit for a SEMI?

It is an audit conducted within your organisation (but with internal independence) to assess whether your AML/CTF framework is fit for purpose, properly documented, and that controls are operating effectively in practice.

Why do SEMIs need an internal AML audit?

Because regulators expect that smaller institutions demonstrate not just policies but evidence of operational effectiveness, identification of weaknesses, and actions taken to improve compliance.

What does operational effectiveness testing involve?

It involves reviewing actual transactions, customer files, system logs or controls in action to determine if AML controls are working as designed, including monitoring, escalation, KYC/KYB, and suspicious activity reporting.

How is gap analysis performed during the AML audit?

By comparing your AML practices (documentation, controls, operations) with regulatory standards and best practices to find where there are missing or under-performing elements and where risk exposure is elevated.

What happens after audit recommendations are made?

After recommendations, a remediation plan is developed, with defined actions, responsibilities and timelines. Follow-up verification is then performed to ensure the changes have been implemented correctly.

Independent Internal AML Audit for SEMIs

Independent Internal AML Audit

An independent internal audit of your AML/CFT framework is a critical component of a robust compliance culture for SEMIs. Regulators such as the FCA expect firms to actively assess the effectiveness of their controls, identify gaps, and demonstrate proactive management of financial crime risks. ABM provides a detailed, objective, and practical internal AML audit to ensure your SEMI’s compliance framework is both effective and inspection-ready.

Comprehensive AML Framework Assessment

We evaluate your AML policies, procedures, and internal controls, ensuring they align with FCA expectations, the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLR 2017), and relevant FATF recommendations. Our review examines how effectively your AML framework is applied across all operational units and client interactions.

Control Effectiveness Testing

ABM conducts real-world testing of key AML controls, including customer due diligence (CDD), enhanced due diligence (EDD) for high-risk clients and PEPs, transaction monitoring, and suspicious activity reporting (SAR) processes. We examine alert handling, escalation procedures, and remedial actions to ensure controls function as intended in day-to-day operations.

Risk-Based Review

Our audit focuses on identifying high-risk clients, products, and transaction types, verifying that risk-based controls are applied appropriately. We assess ongoing monitoring processes, periodic reviews, and risk scoring to confirm your SEMI’s AML program remains responsive to emerging threats and regulatory expectations.

Gap Analysis & Recommendations

ABM identifies weaknesses, deficiencies, or inefficiencies in AML policies, procedures, or their implementation. We provide actionable, prioritized recommendations to strengthen controls, improve operational effectiveness, and enhance overall regulatory readiness.

Regulatory Inspection Preparedness

We prepare your SEMI for FCA reviews or inspections by reviewing documentation, processes, and control effectiveness. Mock audits and evidence compilation ensure your internal AML program can withstand external scrutiny, and our guidance helps MLROs and staff present controls confidently to regulators

Continuous Monitoring & Follow-Up

Beyond the audit, ABM provides ongoing support to maintain and enhance AML control effectiveness. This includes tracking remediation progress, updating policies and procedures, and refining transaction monitoring frameworks, ensuring your SEMI remains fully compliant and operationally resilient.