How to Hire a Money Laundering Reporting Officer (MLRO)?

AML and sanctions-related fines have already topped US$45.679 billion in the 21st century, showing how costly compliance failures can be. These penalties are a reminder that even well-established companies can face serious consequences if their controls are not strong enough.

This is where a fractional Money Laundering Reporting Officer (MLRO) becomes invaluable. Instead of committing to a costly full-time hire, companies can bring in a part-time executive who delivers the same senior-level expertise.

In this blog, you’ll see how a fractional MLRO helps startups solve regulatory challenges, establish strong compliance frameworks, and grow confidently while ensuring core responsibilities are effectively managed.

Key Takeaways:

• Expert AML Oversight, On Demand: A fractional MLRO monitors transactions, reports suspicious activity, and develops AML policies, providing senior-level compliance expertise without a full-time hire.
• Clear Role Distinction: The MLRO handles external reporting and acts as the primary point of contact with regulators, while the MLCO focuses on internal compliance processes and staff training.
• Qualified and Experienced Professionals: Look for candidates with certifications such as CAMS or CFCS, alongside relevant industry experience, to ensure competent AML oversight.
• Cost-Effective Compliance Solution: Startups and high-growth firms benefit from fractional MLROs, gaining expert guidance and regulatory assurance without the overhead of a permanent hire.
• Thorough Legal and Regulatory Checks: Background verification, certifications, and sanctions screening are critical to confirm that the MLRO candidate meets all compliance requirements.

Who is a Money Laundering Reporting Officer (MLRO)?

A Money Laundering Reporting Officer (MLRO) is a senior compliance professional who ensures that your company follows anti-money laundering (AML) regulations. The MLRO protects your business from financial crime risks, including money laundering, terrorist financing, and other illegal financial activities.

Key responsibilities of an MLRO include:

• Monitoring Transactions: The MLRO makes sure all transactions are monitored to spot suspicious activity that could indicate money laundering or other financial crimes.

• Reporting Suspicious Activities: If suspicious transactions are found, the MLRO reports them to the relevant authorities, such as the Financial Intelligence Unit (FIU) or FinCEN in the U.S., keeping your business compliant and protected.

• Developing and Implementing AML Policies: The MLRO creates policies, procedures, and internal controls to prevent money laundering and ensure your company meets all legal requirements.

• Staff Training: The MLRO trains your employees to understand AML laws and recognize signs of suspicious activity, building awareness across your organization.

• Compliance with Global Regulations: The MLRO stays updated on global regulations, including FATF guidelines, and ensures that your company complies with rules across different jurisdictions.

Fraxtional helps companies determine which role best fits their needs by offering flexible solutions, including fractional MLRO services for startups and growing businesses. Whether you need someone for reporting or internal compliance, Fraxtional’s expertise helps you make informed decisions.

6 Qualifications That an MLRO Requires

When hiring a Money Laundering Reporting Officer (MLRO), it’s essential to understand which qualifications are most important. The right candidate will keep your business compliant with AML regulations and provide strategic oversight in a regulatory space. 

Below are the seven qualifications you should look for when hiring an MLRO:

1. Relevant Certifications

Certifications are essential for confirming an MLRO’s expertise in AML compliance and financial crime prevention. They show that the candidate has undergone rigorous training and is committed to staying updated with industry standards. It includes:

• Certified Anti-Money Laundering Specialist (CAMS): This is the leading certification for AML professionals worldwide. It ensures that the MLRO understands global AML regulations and the best practices for detecting and preventing money laundering.

• Certified Financial Crime Specialist (CFCS): This certification covers a broader range of financial crimes, including fraud, terrorist financing, and money laundering.

• Other Relevant Certifications: Certifications like CFE (Certified Fraud Examiner) or ICA (International Compliance Association) are also valuable, as they deepen the MLRO’s understanding of how money laundering intersects with fraud and other illegal activities.

2. Know-How in Your Industry

Industry-specific experience is crucial because it equips the MLRO with a deep understanding of the regulatory environment and compliance challenges unique to your business. It includes:

• AML in FinTech: An MLRO with FinTech experience will understand the specific challenges in digital payments, online banking, and cross-border transactions. They will be familiar with managing risks related to digital wallets and fraud detection.

• AML in Crypto: For a crypto company, the MLRO must be highly familiar with the regulatory space surrounding digital assets. They should understand FATF’s guidelines on crypto transactions, how to track crypto wallets, and comply with the Travel Rule.

• Cross-Border Compliance: An MLRO with experience in international cross-border compliance should understand how to comply with complex global regulations, such as the Bank Secrecy Act (BSA) in the U.S.

3. Good Analytical Skills

The ability to analyze complex financial transactions is crucial for identifying patterns of suspicious activity, a key component of an MLRO’s role. It includes:

• Transaction Monitoring: The MLRO should be able to evaluate large volumes of transactions and identify suspicious activities such as structuring, layering, or integration.

• Risk Assessment: The MLRO must assess the AML risk associated with different clients, products, or geographies. For example, they should evaluate the risk of doing business with countries known for high levels of financial crime.

• Data Interpretation: MLRO should be able to spot trends and correlations between multiple data points, which helps prevent money laundering in the early stages.

4. Communication and Reporting Skills

The MLRO is responsible for preparing detailed reports when suspicious activity is identified. Clear communication is essential for presenting the findings in a way that regulators can easily understand, preventing penalties and reputational damage.

The MLRO also needs strong interpersonal skills to ensure that the company maintains a transparent and cooperative relationship with regulators.

5. Experience with Compliance Tools and Technology

The MLRO should be proficient in using AML platforms, such as Actimize, Oracle Financial Services, or Apex, to automate transaction monitoring and flag suspicious activities.

In the crypto space, familiarity with tools like Chainalysis or Elliptic is vital. These platforms help the MLRO track blockchain transactions and identify potentially illicit flows of digital assets.

The MLRO should also be knowledgeable in RegTech platforms that automate compliance reporting and ensure adherence to the latest regulatory updates, such as FATF's crypto guidelines.

6. Educational Background

A degree in finance, business, law, or economics can provide the MLRO with the knowledge necessary to understand complex financial regulations and compliance requirements.

An MLRO with post-graduate studies in financial crime, regulatory law, or compliance may offer deeper insights into the legal and financial aspects of AML. It enables them to better handle complex compliance challenges.

Once you are aware of the right qualifications, learn how to evaluate candidates to find the best fit for your company.

Also Read: Understanding the Role of an Anti-Money Laundering Officer

5 Ways to Interview and Assess MLRO Candidates Effectively

Interviewing and assessing Money Laundering Reporting Officer (MLRO) candidates is a crucial step in finding the right person to oversee your company’s AML compliance. Below are practical strategies to help you evaluate MLRO candidates and identify the best fit for your business.

1. Know Their Understanding of Regulations

The first part of the interview should focus on the candidate’s grasp of AML regulations. This forms the foundation of the MLRO role, so it’s essential to see whether they are current with both global and industry-specific rules.

Ask Key Question: "Can you walk us through how you stay updated on the latest AML regulations, and how you would apply these in our organization?"

You can look out for:

• Knowledge of global and local regulations: The candidate should be familiar with FATF guidelines, MiCA (crypto), FinCEN (U.S.), and PSD2 (FinTech). They should be able to explain these frameworks and how they’ve applied them in prior roles.

• Understanding of sector challenges: Compliance isn’t just about transactions; it’s about anticipating emerging risks. The candidate should show the ability to evaluate and manage these risks effectively.

2. Check Their Risk Management Experience

An MLRO’s core responsibility is to identify and reduce compliance risks. Assess their hands-on experience with transaction monitoring, as it’s a critical part of AML operations.

Ask Key Question: "Tell us about a time when you identified suspicious activity in a transaction. What steps did you take, and how did you manage the situation?"

Look for candidates who can explain how they monitor financial activity, detect suspicious patterns like structuring or layering, and escalate concerns appropriately.

3. Test Problem-Solving Skills

MLROs frequently encounter complex compliance scenarios and must thoroughly investigate potential issues. Scenario-based questions are effective for assessing investigative and problem-solving skills.

Ask Key Question: "Imagine a situation where a customer’s transaction history raises red flags but doesn’t conclusively indicate money laundering. How would you handle the investigation and reporting?"

You can look out for:

• Analytical mindset: Candidates should be able to break down complex situations, analyze data, and identify the root causes of potential risks.

• Risk mitigation: The MLRO should demonstrate the ability to design and implement strategies that resolve compliance gaps while maintaining operational efficiency and regulatory adherence.

4. See How They Handle Changing Rules

AML regulations are constantly evolving. The MLRO must be able to respond quickly to new laws, guidelines, and emerging risks.

Ask Key Question: "How have you adapted your compliance program to accommodate significant regulatory changes, such as new guidelines or enforcement actions?"

The MLRO should show the ability to adjust compliance programs promptly while maintaining strong internal controls and ensuring ongoing regulatory compliance.

5. Make Sure They Fit Your Company Culture

Finally, ensure the MLRO fits your company’s culture and values, particularly in a fast-growing, effective environment.

Ask Key Question: "How would you foster a culture of compliance within a fast-growing organization, and ensure that compliance is integrated into daily operations?"

You can look out for:

• Cultural fit: Candidates should understand the importance of building a compliance-focused culture and be able to integrate compliance into the organization’s broader strategy.

• Adaptability: The MLRO should show the ability to thrive in a fast-paced, ever-changing environment while effectively managing compliance risks.

Fraxtional helps guide you through this process by providing fractional MLROs with the right balance of expertise and leadership skills. Their professionals can support you in ensuring you’re hiring the best fit for your business needs, offering senior-level compliance leadership.

Also Read: Comprehensive Guide to Transaction Monitoring in AML

Top Challenges in Hiring an MLRO for Long-Term Compliance Success

Hiring the right Money Laundering Reporting Officer (MLRO) is critical to keeping your company compliant with anti-money laundering (AML) regulations. At the same time, attracting and retaining top-tier talent for this role can be challenging.

Below are the key challenges companies face when hiring an MLRO and offer strategies to overcome them.

Also Read: Biggest AML Penalties Overview 2025

Why Fraxtional Is the Right Partner for Your Fractional MLRO Needs?

As businesses face complex regulatory requirements, having the right Money Laundering Reporting Officer (MLRO) leadership is crucial. Fraxtional is uniquely positioned to provide the specialized expertise required to build and maintain strong, adaptable AML frameworks while keeping pace with evolving regulations.

Here’s how Fraxtional stands out as your fractional MLRO partner:

• Ongoing Compliance Journey: At Fraxtional, we understand that AML compliance is not static and evolves as your business grows. We embed experienced MLRO professionals within your organization to provide actionable, results-driven solutions tailored to your specific needs.

• Tailored Solutions: We customize our fractional MLRO services to address your business’s unique compliance challenges, ensuring seamless compliance at every stage of your growth.

• Industry Expertise: Our professionals bring years of experience in AML, KYC, and regulatory compliance across the U.S., EU, and global markets. With deep industry knowledge, we offer insights that go beyond regulatory checkboxes, helping your business stay compliant in an ever-changing landscape.

• Navigating Complexities: Fraxtional guides you through the intricacies of AML compliance in your industry, ensuring that you not only meet current standards but also stay ahead of future regulatory changes.

• Strategic Compliance Enablement: Partnering with Fraxtional means working with experts who prioritize both your business’s long-term growth and regulatory stability. We help make AML compliance a strategic enabler, allowing you to focus on scaling your business while managing risks effectively.

• Flexible and Adaptive Involvement: Our fractional MLRO services are designed to adjust to your business’s evolving needs. Whether you require minimal involvement or deeper leadership support, we ensure your compliance framework remains strong, scalable, and sustainable as your business grows.

Final Thoughts

A Money Laundering Reporting Officer (MLRO) plays a critical role in keeping your company compliant with AML regulations. They oversee transaction monitoring, report suspicious activities, develop AML policies, and provide staff training.

Fraxtional’s fractional MLRO services offer expert compliance leadership, guiding your team without the cost of a full-time hire. With hands-on experience in AML program management, risk mitigation, and regulatory reporting, they integrate smoothly with your team to strengthen your compliance framework.

‍Partner with Fraxtional today to manage risks effectively and keep your business confidently compliant with all regulatory requirements.