# How to nail your banking audition every time Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-06-28 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Crypto Compliance Strategies for Banking Auditions Meta Description: Discover how Emily Harris, Head of Compliance at Fiat Republic, empowers crypto platforms to navigate regulatory risks and enhance financial crime prevention. URL: https://financedigest.com/how-to-nail-your-banking-audition-every-timehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1289309508-1736815617660-compressed.jpg) _By_ **_Emily Harris,_** _Head of Compliance at_ [_Fiat Republic_](https://fiatrepublic.com/) ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/emily-harris-1-450x675-1736815617652-compressed.jpeg) Emily Harris, Head of Compliance at Fiat Republic As Head of Compliance at Fiat Republic, I am responsible for onboarding a crypto platform and integrating them into our fiat-as-a-service solution. Delivering reliable access to fiat currency for crypto platforms is paramount. As is being a trusted provider, delivering reliable access to [crypto flows for banks](https://www.financedigest.com/new-u-s-sanctions-imposed-for-russian-bank-oligarchs-crypto-miner-bitriver.html "New U.S. sanctions imposed for Russian bank, oligarchs, crypto miner BitRiver"). So, it won’t surprise you to learn that we have a robust compliance-first approach and there are specific ways that crypto providers can take compliance more seriously and nail their [banking auditions](https://www.financedigest.com/kpmg-stands-by-audits-of-silicon-valley-bank-and-signature-bank-ft.html "KPMG stands by audits of Silicon Valley Bank and Signature Bank – FT") every time… ## **Correctly conducting risk assessments** Firstly, I’d expect to see how a crypto platform identifies, assesses and understands its various [financial crime](https://www.financedigest.com/financial-crime-is-the-chink-in-the-banks-armour.html "Financial crime is the chink in the banks’ armour") risks. How does it determine the likelihood and [impact of risks materialising from its customers](https://www.financedigest.com/how-will-open-banking-impact-the-customer-experience.html "How will Open Banking impact the customer experience?"), products and services. But also from its transactions, delivery channels or geographical areas of operation. [Crypto transactions may be more transparent than traditional financial](https://www.financedigest.com/uk-financial-watchdog-urges-political-support-for-crypto-bans.html "UK financial watchdog urges political support for crypto bans") transactions, depending on the blockchain network used. At the same time, no [financial product is too simple or too sophisticated to be used for financial crime](https://www.financedigest.com/australia-financial-crimes-regulator-opens-investigation-into-britains-entain.html "Australia financial crimes regulator opens investigation into Britain’s Entain"). Newer players may not understand the full extent of their [risk exposure](https://www.financedigest.com/preventing-an-operationally-crippling-ransomware-attack-do-you-know-where-your-risk-exposure-lies.html "PREVENTING AN OPERATIONALLY CRIPPLING RANSOMWARE ATTACK – DO YOU KNOW WHERE YOUR RISK EXPOSURE LIES?"), so they might not have the appropriate risk mitigation and monitoring in place. We want to help educate them on this.  [Regulatory risk](https://www.financedigest.com/is-regtechs-rise-one-way-tackle-the-international-regulatory-game-of-risk.html "Is Regtech’s rise one way tackle the international regulatory game of Risk?") is also key, partly because it’s so diverse and fast-moving. In Europe, the Markets in Crypto-Assets (MiCA) regulation is on the horizon. More proactive European [regulators are also creating](https://www.financedigest.com/the-gibraltar-blockchain-exchange-announces-public-token-sale-event-to-create-world-leading-licensing-and-regulation-standards-in-the-industry.html "The Gibraltar Blockchain Exchange Announces Public Token Sale Event To Create World Leading Licensing and Regulation Standards In The Industry") their own regimes. I’m looking to assess whether the [crypto platform](https://www.financedigest.com/meta-to-wind-down-nfts-on-platforms-amid-crypto-bust.html "Meta to wind down NFTs on platforms amid crypto bust") understands the implications of operating in a regulated environment and dealing with regulators. ## **Implementing the right policies, procedures and controls** The [next step would be to review a crypto platform’s](https://www.financedigest.com/fime-launches-the-next-generationof-its-emv-level-3-test-platform.html "FIME launches the next generationof its EMV Level 3 test platform") internal policies, procedures and controls. These should be clearly documented and should explain how it plans to undertake its responsibility to prevent money laundering, terrorist financing, [fraud and financial](https://www.financedigest.com/why-an-orchestrated-digital-identity-strategy-is-vital-for-financial-organisations-in-fighting-fraud.html "Why an orchestrated digital identity strategy is vital for financial organisations in fighting fraud") crime generally.  Typically, I’d expect to [see something around the firm’s risk](https://www.financedigest.com/heineken-sees-europe-resilience-offseting-asia-slowdown-risk.html "Heineken sees Europe resilience offseting Asia slowdown risk") appetite and how it evaluates various risks according to a risk-based approach. For example, how it undertakes customer due diligence, verifies customer identity, and understands the intended nature and purpose of customer relationships. But also how it establishes source of [funds and wealth](https://www.financedigest.com/norway-wealth-fund-employee-sues-for-workplace-gender-discrimination.html "Norway wealth fund employee sues for workplace gender discrimination"), scrutinises transactions and conducts ongoing monitoring. Having nicely documented policies is just the start. I’m looking to [see that the policies](https://www.financedigest.com/key-fed-official-sees-rates-liftoff-in-2023-as-policy-debate-heats-up.html "Key Fed official sees rates liftoff in 2023 as policy debate heats up") are live within the business, regularly reviewed, audited and updated. I’m assessing whether the crypto platform can demonstrate that it has a good understanding of what its processes are. Does it have the [systems and controls](https://www.financedigest.com/version-control-systems-market-gain-impetus-due-to-the-growing-demand-over-2017-2026.html "Version Control Systems Market Gain Impetus due to the Growing Demand over 2017 – 2026") in place that it says? Are these being applied consistently and effectively? Crypto platforms may buy [compliance tools or engage](https://www.financedigest.com/why-compliance-is-the-opposite-of-engagement.html "Why compliance is the opposite of engagement") third-party vendors, for example to do ID verification or sanctions screening, and think it’s “job done”. Sadly, it’s not that simple. You can outsource completion of a task to a tool or a vendor, yet the responsibility remains with you. Crypto platforms [must understand](https://www.financedigest.com/finance-execs-must-understand-ai-or-risk-falling-behind.html "Finance execs must understand AI or risk falling behind") how their tools are configured and why. And whether they adequately address the risks their [business is facing](https://www.financedigest.com/overcoming-challenges-faced-by-women-in-business.html "Overcoming challenges faced by women in business"). ## **Look to hire a Money Laundering Reporting Officer (MLRO)** Lastly, having an MLRO is a great way to be more [accountable for compliance](https://www.financedigest.com/onkho-delivers-free-no-strings-attached-compliance-workflow-solution-for-accountants.html "Onkho Delivers Free ‘No Strings Attached’ Compliance Workflow Solution for Accountants "), and is a requirement for Fiat Republic’s crypto platform members. This person may have a different job title, depending on the jurisdiction, but there [must be a person responsible for compliance](https://www.financedigest.com/fintechs-must-remove-security-and-compliance-friction-to-unlock-new-growth.html "Fintechs Must Remove Security and Compliance Friction to Unlock New Growth"). I [need to know](https://www.financedigest.com/g20-summit-what-you-need-to-know-now.html "G20 Summit: What you need to know now") who the nominated person is, where they’re based, and how I can contact them when needed. In Europe, the Fifth [Anti-Money Laundering](https://www.financedigest.com/anti-money-laundering-time-to-take-a-new-approach.html "ANTI-MONEY LAUNDERING: TIME TO TAKE A NEW APPROACH?") Directive made cryptocurrency exchanges ‘obliged entities’ bound by the same AML/CFT requirements as financial institutions. So, the MLRO should be appropriately qualified, experienced and senior, with a clear reporting line into [senior management](https://www.financedigest.com/senior-managers-regime-what-does-it-mean-for-the-industry.html "SENIOR MANAGERS REGIME – WHAT DOES IT MEAN FOR THE INDUSTRY?") and/or the board. In the past I recall onboarding a payments company hiring their first MLRO and offering a salary of around a quarter of the [market rate](https://www.financedigest.com/no-santa-rally-for-markets-as-central-banks-dampen-peak-rate-hopes.html "No Santa rally for markets as central banks dampen peak rate hopes"). This didn’t give a good impression of how they valued the MLRO role, or how seriously they took compliance. The MLRO is the focal point internally for all AML/CFT activities, as well as the external contact with [bank compliance departments and regulators](https://www.financedigest.com/exclusive-u-s-regulator-seeks-sale-of-silicon-valley-bank-signature-bank-portfolios-sources.html "Exclusive-U.S. regulator seeks sale of Silicon Valley Bank, Signature Bank portfolios-sources"). Having a credible [person in the role is a must](https://www.financedigest.com/makes-successful-seller-digital-agewhy-sales-professionals-must-retain-personal-touch-succeed.html "What makes a successful seller in the digital age?Why sales professionals must retain their personal touch to succeed"). **This is a Sponsored Feature.** --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---