Interview with Stephanie Knoop – Head of Compliance & Money Laundering Reporting Officer at NatWest Bank Plc German Branch.

Stephanie Knoop is a business lawyer and regulatory specialist and Head of Compliance and Money Laundering Reporting Officer for NatWest Bank Plc German Branch. She has responsibility for compliance oversight, conduct and financial crime risk management as well as advising management on these issues.

Please note that the comments expressed in this article are Stephanie Knoop’s personal views and are in no way associated with her current employer nor any of her previous employers.


How are you coping under the current restrictions?

Pretty well actually – we’re entering our sixth week, although there are now some relaxations of the lockdown starting to happen and so hopefully, an end is in sight. I’m someone who likes being in an office and interacting with colleagues, so it was quite difficult at first. I’m now in a routine though – things improved when I started having proper breaks and a clear end to the working day. I also enjoy cycling and so have kept this up.

Tell us about your journey into AML / financial crime – how did you come to work in this area?

I’m a business law graduate and started out working for Clifford Chance as a transaction lawyer mainly in the capital markets. I then moved to Barclays Bank Frankfurt Branch, working here for nearly six years. This was an opportunity to learn about different regulations through dealing with many of its offices across Europe. I found compliance really interesting as was learning about financial crime. Next, I moved to Commerzbank, joining as a compliance specialist, gaining more experience along the way – I was involved in training and financial crime reviews and increasingly, developed knowledge of financial crime and best practice in mitigating against this, again gaining understanding from assessing the financial crime set up of branches globally. From here, I moved to my current role at NatWest, where I have more responsibility, with oversight of AML and transaction reporting and being a main contact for German regulators, in addition to helping our colleagues gain awareness of what we do.

In your opinion, what is the biggest challenge in the market currently? How can we address it?

There are ongoing concerns about a lack of alignment between different countries, which is particularly challenging when you are working in a multi-national organisation. So, if you take the recently introduced Fifth Money Laundering Directive, for example, you have the situation with some countries, such as Germany, gold-plating the rules, whereas others are delayed in the work or have not implemented them at all. There needs to be a rethink about this and I feel that harmonisation could be better achieved if an EU regulation, which would be directly applicable to the member states issues instead of an EU directive. This would prevent inconsistent implementation on local level and would be helpful in solving some of the data protections issues that international entities are facing.

Where do you see there being the greatest innovation in the market?

I would single out last year’s Anti Financial Crime Alliance (AFCA), which was launched by the German regulator BaFin in September 2019. This was a move to introduce better collaboration and communication between relevant parties and the regulator, the Financial Intelligence Unit with the Federal Criminal Police Office entering into an agreement with 14 banks and public authorities to exchange know-how. The result has been to strengthen and better coordinate the fight against money laundering and terrorist financing under the FIU’s leadership. This is a really positive initiative – I think all parties will increase their learning and it will make a real difference in tackling money laundering and terrorist financing. There could also be some learning from this for other countries perhaps.

If you could make one regulatory change though, what would you like that to be?

From my perspective, it would be good to get a quicker turnaround on occasion from regulators. We can be waiting many months for them to produce additional guidance for the local market, when connected to a Directive, for example. Again, when there is a slow response to a SARS report or no response, this can also be a frustration.

Reports have shown there is a spike in COVID-19 fraud. What are your thoughts on this?

Criminals will adapt and use difficult situations for their benefit, and yes, we are seeing an increase in fraud and scams because of COVID-19. These are not just targeted at individuals and it was concerning to see that criminals were quick to try and take advantage of Germany’s loan scheme connected to the crisis – this helps small firms with their cash flow problems and provide ad-hoc loans. We have had examples of the official regional websites used to apply for these loans being faked, with the criminals seeking to steal data. Of course, you need warnings and education, but it again shows how quickly criminals can move.

Does Brexit add more complexity when working on cross border AML projects? Could there be problems for the UK?

Of course, there are a lot of questions around Brexit, but I think there are not necessarily going to be higher risks in terms of financial crime – but we need to know a lot more about cross border arrangements before we can see the full picture.

How can we ensure better cross border collaboration?

This is something we need to work at through regulatory bodies and working groups and in terms of financial crime, we need strong communication, not only across Europe but also other key markets such as the USA. Strong local regulation is always important and we should look to share information on effective operating models.

Do you think the skills needed to work in counter financial crime are changing? What skills are needed?

Yes, and it can be difficult to find the right people and those working at foreign branches in particular, can be tasked with a lot of responsibilities. In terms of the skills, you need a broad range of knowledge, including legal and compliance, but I would also say it is important to be open minded. Things can change very quickly and new requirements may come into force with little notice. As I’ve mentioned, criminals can change the way they operate so fast and new risks can suddenly emerge. So, you need to anticipate this, keep up to date and be aware of what particular risks could affect your business

Transform Finance has launched a series of Virtual AML and KYC events – how important do you think these will be in terms of staying connected?

This is a great way to connect and learn and the current situation has really shown the value of digital. It has been highly useful for training and helping people working better from home. Of course, it can be a great experience to meet people in person, but I think digital is really proving itself now and we’ll be using it increasingly in the future.


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