Five months after the U.S. Treasury Department's Financial Crimes Enforcement Network implemented new due diligence rules to crack down on money laundering, compliance teams have started adjusting to the rules.

A new industry report released this month from Thomson Reuters looks at how 253 anti-money-laundering compliance leaders have adapted to meet the new Customer Due Diligence requirements, or “know your customer” requirements. The May 2018-implemented rule requires applicable financial institutions to have policies and procedures designed to verify customer's identities, the identity of beneficial owners of companies opening accounts, understand the customer relationship, create risk profiles and monitor for suspicious transactions.

More than half of respondents reported the rule's regulatory criteria as its biggest challenge.

“The struggle is, if they were not necessarily doing certain things, they had to implement new processes and train their staff. Making sure that they are, from an auditing perspective, actually following through and doing all of the steps within their newly defined process. That's a big hurdle to overcome. It's a lot of change management,” said Steve Kraus, the director of corporate investigations integrated solutions for Thomson Reuters.

Another finding showed that a number of compliance leaders have shifted to collecting customer information when an account is opened, rather than later in the process. Currently, 40 percent of respondents said they collect a comprehensive amount of information at the start of a relationship with a customer. Only 31 percent of respondents did so in 2017.

A quarter of respondents collect most information within the first week of an account opening, and only 4 percent wait more than 30 days, down from 9 percent last year.

“It's harder to go back to your customer after you've already onboarded them, said that they are your customer, and then go back and ask them for additional information. You want to be proactive in getting that information up front and preventing any risk to your business, both financial or reputational, at the outset,” Kraus said.

There has also been a rise in staffing since the CDD, according to the report. According to the survey, 42 percent of respondents anticipated an increase in staff related to anti-money-laundering efforts and the CDD rule.

Of those, 28 percent said the anticipated increase will be for anti-money-laundering compliance purposes. Only 1 percent of respondents anticipated an increase in staff hired to focus on the CDD rules. Last year, 17 percent of respondents predicted an increase in staffing to plan for the CDD implementation.

“More people are needed to actually do the work, because they're just getting that much more data, and they need that much more data,” Kraus said.

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