American Express recruits college students to bolster anti-money laundering ranks

November 17, 2014

With qualified anti-money laundering professionals in short supply and reciprocal poaching of talent the norm at U.S. financial services firms, American Express Co has begun recruiting university students to fill its junior ranks straight out of college, a senior compliance executive with the company said last week at a compliance conference in Washington.

American Express has developed a successful program that involves hiring graduates as entry-level analysts to do account-monitoring work and training and developing them to do more in an effort to ”manage the expertise drain,” said Rick Small, a senior vice president who heads enterprise anti-money laundering, anti-corruption and international regulatory compliance.

”We’ve been going out to colleges and recruiting out of college. It’s very difficult to find people that have good analytic skills and have the ability to write and communicate clearly, and we’re seeing that they’re being taught that in college,” Small, a former federal prosecutor and bank regulator who is a respected compliance pioneer, said during a discussion panel at the American Bankers Association (ABA) event.

It is not known whether other financial institutions have initiated similar programs.

As the U.S. government has stepped-up enforcement of anti-money laundering laws, demand has grown dramatically for compliance officers with the know-how to help prevent banks from violating regulatory requirements and ensure transactions are adequately monitored for any suspicious activity. Top professionals at the largest institutions can attract salaries in excess of $1 million.

In the wake of high-profile enforcement actions over anti-money laundering lapses, which included not only requirements that compliance be bolstered but also that past transactions be scrutinized, banks such as HSBC, JPMorgan Chase and Standard Chartered have hired compliance personnel in droves, straining even the ample ranks of high-priced consultants.

Poaching from other banks, and from government agencies, has become the norm. Regional hotspots, such as New Castle, Delaware have emerged as banks have rented vast back-office spaces and tried to fill them with cubicles and new anti-money laundering hires and, where necessary, consultants.

In the future, other large institutions with seats to fill may have little choice but to follow American Express’ lead and recruit young professionals.

Small said that while some senior anti-money laundering professionals like to consider themselves experts, ”there’s not rocket science around understanding what money laundering is and what to look for … when we’re doing transaction monitoring.”

Oversight key to avoiding examiner concerns

Amy Rudnick, a former U.S. Treasury Department anti-money laundering official who is now a partner with Gibson, Dunn & Crutcher LLP in Washington, said she liked American Express’ approach, but added that ”you need to make sure that you really are mentoring them, training them, keeping on top of them” to avoid being cited by regulators.

”What the regulators are looking at is ‘Hey, you’re hiring people with no experience for these positions and when we go in there we’re seeing that they’re making mistakes and there’s not a lot of quality assurance,”’ she said during the ABA panel. ”The examiners will say ‘Your staff is not qualified. It’s qualified at the higher level, but not at the lower level.”’

American Express’ strategy ”is a good plan,” said another panelist, John Byrne, executive vice president of the Association of Certified Anti-Money Laundering Specialists, a professional development organization.

”I think it’s something we need to be doing more of. (The anti-money laundering profession) is going to expand … we’re dealing with corruption, we’re dealing with sanctions, that wasn’t the case five, ten years ago, so all of that means there’s going to continue to be a lot of work,” Byrne said.

He added that college students with a business background, who might easily grasp the financial crime risks inherent in financial products and services, would be good candidates for recruitment.

It is a good idea to try to get young people interested in anti-money laundering compliance work because such positions are typically filled by those who are ”a little older,” said Rob Rowe, a lawyer with ABA. He added that young people ”certainly are not flocking toward compliance because of the incredible pressures that are associated with it.”

”That is something we’ve all got to be worried about — recruiting in college, bringing people in, mentoring them and getting them into the system — otherwise none of us are going to retire,” he said, drawing laughter from the crowd, which included few that appeared to be early in their careers.

Moving on

Brian Wimpling, a senior anti-money laundering officer with Florida-based Capital City Bank said recruiting out of colleges is not a viable option for a small bank. He said that if his bank were able to attract ”the young and ambitious” and he were to mentor them, once they were trained, he could not afford to keep them.

”So three years down the line I’ve invested a lot of time and effort … only to have them move to Atlanta, or New York or Charlotte,” he said.

American Express knows that many of those it trains will not remain long-term, but that will not impede the program as long as there is a ”continuous flow” of people entering it, Small said.

”We bring them in and train them, they give us two or three good years and then if they want to move on, they move on, either internally or externally,” he said.

(This article was produced by the Compliance Complete service of Thomson Reuters Accelus. Compliance Complete provides a single source for regulatory news, analysis, rules and developments, with global coverage of more than 400 regulators and exchanges. Follow Accelus compliance news on Twitter: @GRC_Accelus)

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see