What is AML Audit Phase 2?

AML Audit Phase 2 is a comprehensive audit of your anti-money laundering framework, focusing on control effectiveness, testing of transaction samples, gap identification, and recommendations for improvement.

Why is it important to test control effectiveness?

Testing control effectiveness ensures that the policies and procedures you have in place are not just documented but are operating properly and mitigating relevant money laundering and terrorism financing risks.

What happens during a sample transaction examination?

During a sample transaction examination, selected transactions are reviewed in detail to verify compliance with rules and policies, identify anomalies or suspicious behaviors, and assess whether screening and monitoring are being correctly applied.

How are gaps identified and what is cause analysis?

Gaps are identified when existing practices deviate from the requirements or best practices. Cause analysis seeks to determine why these gaps occurred — whether due to process design, staff knowledge, system limitations, or documentation deficiencies.

What are remediation plans and how are they delivered?

A remediation plan is a roadmap of corrective actions to address found weaknesses or gaps, with responsibilities, timeline, and metrics. ABM Global Compliance provides these recommendations and assists implementation.

Is there follow-up to verify remediation?

Yes. Part of the service is a follow-up process to verify that remediation actions have been taken and AML controls are now functioning as intended.

How long does AML Audit Phase 2 typically take?

The timeline depends on the complexity of your AML framework, volume of transactions, availability of documentation and data, and scope of the audit. Usually it spans several weeks.

Who should participate in the AML Audit process?

Key stakeholders typically include compliance officers, internal audit, risk management, senior management, operations staff, and IT/Systems staff if controls or data flows are technology-based.

AML Audit Services | SPI / MSB E-Money Assurance

AML Audit

A robust Anti-Money Laundering (AML) framework is the backbone of regulatory compliance for Small Payment Institutions (SPIs). The FCA expects SPIs to implement effective, risk-based controls, continuously monitor transactions and clients, and demonstrate the ability to prevent, detect, and respond to financial crime.

At ABM Global, our AML Audit delivers a thorough, independent, and practical assessment of your AML/CFT program, providing assurance to regulators while enhancing operational effectiveness and risk management.

ABM’s AML Audit Provides

1. Policy & Procedure Review

Comprehensive evaluation of AML/CFT policies, internal controls, and operational procedures.
Alignment verification with FCA Handbook requirements, MLR 2017 guidance, and FATF Recommendations
Assessment of the adequacy, clarity, and enforceability of policies to ensure they can be consistently applied across all business units.

2. Customer Due Diligence (CDD) & Enhanced Due Diligence (EDD)

Detailed examination of client onboarding processes, identification verification, and beneficial ownership checks.
Evaluation of customer risk classification methodologies, ensuring that clients are correctly segmented by risk level.
Review of EDD procedures for high-risk clients, politically exposed persons (PEPs), cross-border entities, and complex ownership structures.
Verification of ongoing monitoring and periodic review mechanisms to ensure that CDD remains current and effective.

3. Transaction Monitoring & Escalation Processes

Assessment of monitoring systems, including real-time alerts, threshold settings, and pattern detection for suspicious activity.
Review of investigation procedures, escalation protocols, and reporting lines to ensure timely, documented, and effective response to potential AML events.
Evaluation of system integration with operational workflows to ensure monitoring is practical, scalable, and risk-focused.

4. Suspicious Activity Report (SAR) Compliance

Verification of SAR filing procedures, reporting timelines, and adherence to regulatory standards.
Ensuring proper documentation, retention of records, and creation of a robust audit trail for inspection readiness.
Recommendations for streamlining reporting processes without compromising compliance or detection capabilities.

5. Gap Analysis & Recommendations

Identification of deficiencies, process inefficiencies, and compliance risks within your AML framework
Actionable recommendations to enhance internal controls, optimize operational procedures, and mitigate regulatory risk.
Prioritized remediation plans with practical steps to ensure improvements are implementable and sustainable.

6. Regulatory Inspection Preparedness

Support for FCA reviews, HMRC inspections, or internal audits, including mock inspections and documentation review.
Verification that your AML program is regulator-ready, demonstrating operational effectiveness, compliance rigor, and risk management maturity.
Training and guidance for staff and MLROs to ensure preparedness for direct interactions with regulators.