The role of the vendor and third party risk manager in sanctions and financial crime prevention

The role of the vendor and third party risk manager in sanctions and financial crime prevention

The Center for Financial Professionals discuss the role of the vendor and third party risk manager in sanctions and financial crime prevention with Kenneth Wolckenhauer (VP, Vendor Management at Nordea Bank). Kenneth provides his thoughts below ahead of the forthcoming Vendor and Third Party Risk USA conference (NYC, June 13-14).

Q1: Kenneth, thank you for taking the time to speak with us. Please can you tell our readers a little bit about yourself, your professional experience, and your current focus?

After years in telecommunication sales, marketing, and operations, I entered the retail space as a money transfer remitter, where I learned about anti-money laundering risk and controls.  After the stores were sold, I became an AML and Sanctions consultant for FIS, the nation’s premier Fintech company for small/medium banks.  In 2012, Nordea Bank, the largest regional Nordic bank, hired me to take my compliance knowledge to start a third party risk management program at the New York branch.  I am now part of the world-wide rollout of TPRM for the bank.

Q2: You will be delivering a presentation based around the role of the vendor and third party risk manager in sanctions and financial crime prevention . Why do you believe this is an important talking point?   

We are all compliance!  Vendors receive payments, and all payments carry risk for financial institutions.  Knowing how to recognize and escalate suspicious behaviour is key to helping prevent financial crime.

Q3: What county rules and requirements must vendor and third party risk managers be aware of?

Sanctions are country specific.  There are US (OFAC) sanctions as well as BIS export restrictions.  There are limited sanctions that prohibit certain industries or persons from receiving payments.   Anti money laundering scenarios are risk based.   Payments in/out of certain countries increase the AML risk.

Q4: How can vendor and third party risk professionals best identify unusual payments, and what do you believe is their role in this process?

Vendors requesting unusual payment methods (cash, structured payments, or payments to an unknown fourth party).   Vendors having accounts in countries other than where they are headquartered or performing the service.

Q5: What reporting, metric and escalation protocols must vendor and third party risk professionals follow?

Each financial institution has a process to notify compliance for suspicious activity.

Q6: What forthcoming challenges must professionals concerned with vendor, third party, and supplier risk be aware of over the next  6-12 months?

Changes in info security standards, starting in NY, will spread to many jurisdictions.

We also asked Kenneth several informal questions…

If you did not pursue your current career path, what do you believe your alternative career path would have been?

I believe I would have become a history teacher

We would like to know on average how many emails do you receive in one day?

Probably about 100

What is your favorite meal and drink?

I really enjoy a flat iron steak and a cold beer

How would you rate your memory? (1-10, with 10 being Excellent)

I have a good memory, I would say a 9 out of 10

If you were on an island and could only bring three things, what would you bring?

I would bring a guitar, iPad, and a comfortable pillow!