Advisor and CEO
AML Audit & Advisory AB
This post explores the AML landscape through a 2024 lens enabling auditors and accountants to anticipate potential compliance risks emerging from stricter requirements. Carl-Fredrik examines the challenges of increasing regulatory burdens enforced on the accounting industry and how to approach them in the most efficient way. Learn about the potential new regulatory requirements coming from both EU and local Swedish authorities and how to adapt to the ever changing environment. Finally, encouraging actions to be taken in the industry to ensure efficiency and compliance in the best way.
Supervisors do not appear to be easing supervisory pressure in 2024. Sanction decisions are still coming at a high pace and with ever-increasing expectations from the authorities.
Both accounting firms and auditors still have extensive shortcomings even in the most basic areas of AML.
Overwhelming requirements lead to an increased risk of non-compliance
The industry doesn’t always manage to take all relevant risk factors into account in the general risk assessment and the related customer due diligence measures. This is often attributed to the inadequately designed regulations, coupled with the need for ongoing monitoring of sources and the rapid generation of information.
Many actors do not take terrorist financing risks sufficiently into account. Instead, the focus is placed on anti-money laundering risk management. We need to rethink this approach, especially when it comes to general risk assessment.
How do we ensure efficient AML compliance?
The increasing AML requirements are attracting more software providers for digital KYC solutions, and many of them have gained a substantial customer base. Among the systems I’ve personally encountered, Penneo KYC manages to address the necessary inquiries in accordance with regulatory requirements set by authorities.
Many accounting firms that have recently made an investment in their KYC software solutions are thus still lacking in their regulatory compliance. This is likely to be corrected as the accounting industry’s knowledge of AML improves and the market matures.
New requirements require new trainings
In 2024, the county administrative boards will most likely introduce a new requirement for accounting firms to annually report on information regarding the internal AML work as well as specific information about customers, services, etc. The financial industry is already subject to such a requirement. Exactly what information is to be reported is not yet specified. When the information becomes known, accounting firms should see it as an opportunity to clean up
policy documents, routines, ongoing measures and customer data.
The EU continues to dominate the AML agenda and regulations. We are waiting for a final version of a new EU regulation that replaces the Swedish Anti-Money Laundering Act to be presented and take effect. When this happens – it is still uncertain when – accounting firms will also need to update policy documents.
New Year’s resolutions for the accounting industry
A hope for the new year is that the auditing and accounting industry organisations will improve the support to their members by providing new templates and guidelines. Unfortunately, the current material is far from sufficient for members to be able to meet the increasing demands of the county administrative boards.
I would also encourage the county administrative boards and the police authority in particular, to improve the ongoing training in the accounting industry. Unfortunately, their presentations offer poor practical guidance and few useful details to operators. The accounting industry also needs to develop its own training materials and adapt them to their own business – an area for improvement for many.
Meeting Swedish AML requirements with Penneo KYC
I collaborated with Penneo to develop the legal framework for their KYC software, adapted to the requirements of the Swedish AML laws.
Penneo KYC is now available in Sweden. Book a personalized session with our KYC experts.
Disclaimer: Disclaimer: This article applies to the AML updates in Sweden. Be aware that country-specific differences exist, if you are dealing with AML compliance in a country different from Sweden.
