Key answer
After an AML review identifies gaps, senior management should triage the findings, apply any immediate risk containment, confirm root causes, approve a dated action plan, assign accountable owners, remediate affected records and wider populations, and retest material controls. Changing a policy or marking an action “complete” is not enough unless the operating evidence shows the weakness has actually been corrected. Closure should show that the immediate case, wider population and root cause were addressed.
Start with risk, not document formatting
Some findings require prompt containment before the final report is polished. Examples may include a material sanctions-screening failure, inability to identify beneficial owners, an ineffective suspicion escalation route or large populations of overdue higher-risk reviews. Management should assess whether services, approvals, monitoring or access need temporary restriction while the facts are established.
Other issues can proceed through planned improvement. The distinction should consider regulatory significance, customer and service exposure, extent, duration, recurrence and the reliability of compensating controls. A low sample count does not automatically make a control failure low risk.
A remediation lifecycle
Management should first confirm the finding and affected process without turning the exercise into a negotiation over wording. Where management disagrees, record the evidence and decision. Next, identify whether the problem is isolated or systemic and whether it affects current customers, closed relationships or pending services.
The corrective design should address the cause, not only the visible symptom. Implementation then needs evidence and, for material issues, independent or suitably objective retesting.
Finding the real root cause
| Observed symptom | Possible root causes to test |
|---|---|
| Missing UBO verification | Unclear ownership procedure, weak form, staff knowledge, approval override or poor quality control |
| PEP searches not evidenced | Undefined screening population, system configuration, no retention step or unresolved potential matches |
| Overdue customer reviews | Risk rating not linked to frequency, missing reminders, inadequate staffing or no escalation of backlog |
| Generic customer risk ratings | Template factors, misunderstood scoring, weak data or management pressure to minimise EDD |
| Policy differs from practice | Policy copied from another firm, process changed without governance or forms not aligned |
| No internal suspicion reports | Possibly no reportable events—but also test staff awareness, reporting channels, culture and record confidentiality |
Root-cause analysis should be proportionate, but “human error” is rarely sufficient on its own. Ask why the system did not prevent, detect or correct the error.
Designing an action plan management can govern
Each action should identify the finding, risk, corrective outcome, tasks, owner, approver, target date, dependencies, evidence needed for closure and retesting plan. Where an action will take time, set milestones and interim risk controls.
Use named roles and accountable individuals in the controlled action register. “Compliance team” is not a clear owner. Senior management should receive progress and overdue reporting, approve material risk acceptance and resolve resource constraints. Target dates should reflect risk rather than convenience.
Policy, process, people and back-book remediation
A durable fix often needs more than one layer:
- Policy: clarify the required rule, responsibility, threshold, evidence and escalation.
- Process and system: update forms, fields, workflow, access, alerts and quality controls.
- People: provide targeted role-based training, supervision and practical scenarios.
- Current population: identify affected existing customers or records, prioritise by risk and perform back-book work.
- Governance: update reporting, metrics, exception handling and independent assurance.
Back-book scope should be evidence-based. If three sampled higher-risk files lack an EDD record, correcting only those three does not establish that the rest of the population is sound. Management should identify the affected period and population, then use complete review or defensible sampling as appropriate.
Closure evidence and retesting
Possible closure evidence includes an approved policy with version history, configured workflow, completed customer remediation, screening logs, management approvals, training attendance and assessment results, exception reports, and quality-control samples. Evidence should show both design and operation.
Retesting asks whether the control now works consistently. A new form proves design; completed files produced after implementation help prove operation. For a backlog, management also needs evidence that affected older records were addressed and the new process prevents recurrence.
Closure should be approved by an authorised person who is sufficiently objective for the risk. Where the reviewer will perform follow-up, the original criteria and sample population should remain traceable.
Regulatory and STR considerations during remediation
A finding may reveal customer facts or activity that require prompt reassessment, EDD, restriction, termination or internal escalation to the MLRO. Remediation project records should not replace the firm’s existing suspicious transaction reporting process. If knowledge or suspicion arises, the MLRO should consider the applicable reporting obligations and current JFIU process without inappropriate delay.
The Companies Registry’s public disciplinary cases show that orders for remedial action can accompany reprimands and pecuniary penalties. Management should not assume that a policy update alone answers a failure involving customer verification, PEP procedures, monitoring or record-keeping.
Use the report structure to define findings, the policy guide for control updates, the CDD form guide for workflow changes and the risk assessment guide for reprioritising affected customers.
Frequently asked questions
Should every finding be fixed before the report is issued?
Who should own remediation?
When can a finding be closed?
Primary sources
Regulatory references were checked on 28 July 2026. Always consult the current official text for a live matter.