Insight
In Financial Crime, some backlogs will push you dangerously close to the edge of non-compliance (if not over the edge). But it happens. We put together a list of avoidance techniques to detect issues and promote a culture of vigilance.
The Backlog: that seemingly never-ending list of stuff that needs doing— and yet, isn’t getting done. If you’ve worked in financial crime for longer than a few minutes, you’ve likely come across one, five or twenty backlogs.
The thing is: you can’t really afford to have a backlog, it’s not a comfortable place to be. By definition, a backlog is a bunch of stuff that you don’t have capacity to cover and in financial crime, some backlogs will push you close to the edge of non-compliance (if not over the edge). Just as importantly, backlogs get in the way of the goals that are critical for you and your customers.
Not all backlogs are made equal, but there are some core types that will feel familiar.
‘Yikes That’s a Lot of Old Stuff!’
Two years ago, someone suggested that you reconfigure a system because it would save a lot of effort, but it just wasn’t a high enough priority in the moment— and now it’s a burden on your shoulders. Testing and monitoring might tell you that an entire rule has become redundant, but you still have hundreds of (now unhelpful) alerts and you can’t find the time to change the rule. Time flies and the backlog grows; it needs some ruthless prioritisation. What will you action and what will you cut? Do you even have time to think about it?
‘We Fixed an Old Problem But…. Made a New One’
It happens. You realise that your customer screening system wasn’t working for five days last month. A change to a system (or even a spreadsheet) means an EDD question hasn’t been asked for several thousand customers. You’re duty-bound to fix these problems, but they often result in a backlog of tasks or alerts that need a lot of manual labour to resolve, not to mind having to fix the underlying issue itself. This is a recipe for anxiety.
‘We Might Get to That Later’
This is the happier side of backlogs, because it represents a hopeful future. There’s always a chance that your team gets through a project faster than anticipated and having a well organised, time-relevant series of follow up actions is plain old good hygiene. When you need to use it, you have instant value adding options and not just another long list of vague to-dos that elicit office-wide groans.
Everyone wants to avoid the endless backlog. There are some things you can do to increase your chances of taming the backlog beast.
A healthy, useful, value-adding backlog needs a handful of items that you know would be useful, but which aren’t absolutely critical. You probably have fifty of these ideas floating around at any time, so jot them down and then prioritise them according to potential impact. Pick the top handful to scope a little more. How long will they take? Who needs to be included? What’s the true benefit— do they save money? Time? Do they set you up for a long-term vision you’ve got stewing? Review this list every six months, even if it hasn’t been used since the last time you checked. On the day you need it, you want it to be an injection of motivation that doesn’t feel like a remediation.
Financial Crime means pressure— from the business, from regulators, from customers and from criminals. Often, you need to respond quickly to emerging threats or situations— and that might mean you want to sacrifice some testing just to get something live. Think carefully about the long-term impact of that choice— it might mean generating large scale manual work that doesn’t actually prevent financial crime and leaves you with a backlog you resent. Test your plans in a non-live environment. Introduce a phased approach so you can test and learn at a controlled pace. Carry out above and below the line testing. Don’t go live until you’re confident that you’ve got the balance right. You’ll thank yourself later when you don’t have 5000 almost definitely false positives that need to be worked because of a failing ruleset.
When is the last time you checked that you’re screening against the right sanctions lists? Do you have immediate access to the most recently updated version of your firm’s Financial Crime Policy? When was the last time you read it? The more you know about what’s going on with your controls, the faster you’re going to see when something swerves. Your problems will be found faster, fixed faster, and result in smaller, more manageable backlogs and fewer remediations. Monitoring a chain of controls that haven’t malfunctioned in years? Ask someone else to look at them: there’s a Poirot somewhere in your team who’ll sniff out the problem. And you should always sniff it out— the price to be paid later is usually that bit more painful.
You can’t afford to have a backlog— but eventually, despite all your best intentions, you’ll have one; it’s the way of the world.
Once you’ve got a troublesome one, you have to work out how to get it under control, and there are a few strategies you can follow for that.
Look at the size of your problem and chop it into parts.
DCM can offer both operational and advisory services to tackle your painful backlog items, or deliver support so your future backlogs are strategically useful and manageable for your often overloaded teams. This leaves you free to smash through your goals and value add initiatives, rather than being sidetracked by existing challenges and backlog burden.
For more information on all our services please get in touch here.
